When will the unfunded mandate for the retirement system stop?
To the Editor:
Senator Sanborn, the below listed Bedford residents are opposed to SB 364. We believe we speak for many more, perhaps all Bedford residents.
Despite the $4.5 billion unfunded obligation of the New Hampshire Retirement System fund, which is the burden of all taxpayers as the Legislature reneged on the state’s original commitment, the proposed legislation will add to – not decrease – taxpayer burden.
At the second Joint Meeting with our district executive councilor, you, our district senator, Bedford’s legislative representatives, the Town Council and School Board, you and the other elected officials heard Bedford residents lament their ever increasing taxes and several of us complain again about the NHRS situation and how that is adding to our tax burden.
Despite an 18 percent return on retirement fund investments the unfunded obligation continues to increase. Now the Legislature believes the currently structured defined benefit approach is not providing a “dignified” retirement for new employees and proposes an additional defined contribution component paid for by the “employer.” We all know that translates to the “taxpayer.” What constitutes a “dignified” retirement? Do we interpret SB 364 as a forecast of future DC “dignified” adjustments?
NHMA has projected an $81 million additional “tax” upon the residential taxpayers (aka employers) forecasted for years 2014-18. See
Bedford, as you know as a resident, was strapped with a nearly $1 million – aggregate of town and schools – increase in annual NHRS costs a year ago. Bedford taxpayers now pay more than $4.5 million annually into the NHRS. It is believed we can expect another such increase with the next biennial NHRS adjustment. Where does this end?
Other states have taken responsible steps to either modify their retirement systems, or a much bolder step, and moved, as the private sector has already done, to a defined contribution (DC) format. When will New Hampshire face the reality the present DB structured system (and now with an additive DC “dignified” component) is unsustainable?
Some of us have seen the “dream sheet” projections that take the NHRS out of deficit years from now. However, as more employees are added and now with another component adding to the taxpayer burden the dream sheets can only be viewed as fiction. The national economy will not sustain 18 percent returns on the retirement fund investments, so where will the money come from to pay down the deficit? Taxpayers! We have either reached or are reaching the saturation point.
The NHMA contends SB 364 is an “unfunded mandate” and “unconstitutional.” Do we have to wait until the courts find the same? In the meantime, the taxpayers would bleed excessively until the courts stop what should be defeated by the Senate.
SB364 should not be enacted. Rather, we urge you as our senator to undertake the responsibility to sponsor and actively work for a full restructuring of the NHRS. We understand the difficulty but believe “kicking the can” any further down the road and adding band aid “adjustments” is clearly not an acceptable, sustainable or affordable approach.
We respectfully request you oppose this legislation and gain the support of your fellow senators to undertake what needs to be done. Let’s not continue to increase the taxpayer burden with the current approach. There are states that have bitten the bullet – New Hampshire should be next.
Please share this with your fellow senators, as the issue affects all New Hampshire taxpayers.
BILL DERMODY, MAC MCMAHON, BILL FOOTE, KEN PETERSON, PAUL GOLDBERG, KEN HAWKINS, HENRY BECHARD and KENT MESSAMORE