Today’s Union Leader is reporting that New Hampshire Senate Republicans are planning to unveil a new pension reform package. According to the article:
The bill raises mandatory contributions by employees, increases retirement ages and required years of service, cuts the number of workers serving on the New Hampshire Retirement System and reduces the compensation that can be considered in pension formulas.
The bill also calls for a study that could lead to creation of a plan like the 401(k) plans that have come to dominate retirement planning in the private sector.
This is an encouraging step forward in the discussion, but more aggressive steps will be necessary in the future. As we pointed out previously, the current New Hampshire pension liabilities are being dramatically underestimated. A more detailed study on this issue is forthcoming.
Overall, the article hits the nail on the head in terms of the primary concern of the bill:
For the most part, the changes will apply to people who are hired after June 30, 2011. Others apply to those with less than 10 years of service, including the changes in retirement age.
The fact that most conditions won’t change for more experienced workers means the reforms would have a slow-motion effect on righting a serious funding shortfall.