New Hampshire's pension fund saw improved returns in fiscal year 2014, shrinking the unfunded liability. However, New Hampshire still has the sixth most underfunded retirement fund in the U.S.
Some flawed accounting methods and the 2008 financial crash contributed to New Hampshire's pension deficit.
In recent years the legislature increased the amount employees contribute to the retirement fund.
The New Hampshire Retirement System (NHRS) has a plan in place to eliminate the unfunded liability by 2039.
"We’re paying the full amount so we’re beginning to fill in the hole. We stopped digging in '05 and now we’re filling it in," said Marty Karlon, spokesman for the NHRS. "It’s not a good place to be, but there’s a reason we got there and hopefully we’re trending in the right direction now."
On the other hand, some legislators believe a more drastic change is needed to save New Hampshire's retirement fund.
Right now the House Special Committee on Public Employee Pension Plans is considering two bills to restructure New Hampshire's Retirement System: HB 369 and HB 556.
HB 369 establishes a defined contribution retirement plan for public employees, which essentially creates 401(k)-style retirement accounts.
HB 556 establishes a cash balance pension plan, which combines individual 401(k)-style accounts and pension guarantees. Under a cash-balance plan, each year the employer contributes a set percentage of an employee's yearly pay, plus interest, to an individual account. If the employee leaves the employer before retirement age, the employee may take the cash contents of the individual account with them. If the employee stays until retirement age, the employee is guaranteed a set monthly pension payment.
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CLICK HERE to learn more about the unfunded liability in the New Hampshire Retirement System.
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