The pivotal step to deliver the first cost-of-living adjustment for nearly 30,000 retired public employees in a decade narrowly cleared the State Senate Thursday.
The 12-11 vote sends the bill (HB 616) for a 1.5 percent increase to the desk of Gov. Chris Sununu, who has said he will sign it.
The increase, effective July 1, would only to go to state, county and local retirees who finished their government service at least five years ago.
The COLA would be capped at a $50,000 pension, meaning no retiree would get more than $750 per year from it.
Senate Majority Leader Dan Feltes, D-Concord, said the state’s unfunded pension liability remains high but the system has stabilized and can well afford this modest increase.
“In my district, 2,400 retirees including people who have worked their entire life, dedicated public servants struggling with food, medicine, heat and rent and we can’t finally go forward with an actual COLA,” Feltes said.
Sen. Jeb Bradley, R-Wolfeboro, pointed out lawmakers approved one-time $500 stipends for retirees in 2011, 2013 and 2018, but a permanent COLA would increase local property taxes by nearly $150 million over the next 20 years.
The COLA would raise state taxpayer costs by more than $40 million over the same period.
“You can’t on the one hand promise property tax relief and then on the other vote for a plan to raise them by $150 million,” Bradley said.
Senate Republicans had again proposed Thursday a one-time, $500 stipend but that failed on the same, 12-11 vote.
The Senate GOP plan would have paid the stipend with $7 million in state dollars and only grant it to those making up to a $40,000-a-year pension.
Sen. Jeanne Dietsch, D-Peterborough, broke ranks with the other Senate Democrats and she opposed the COLA and backed the one-time stipend.
She said the state retirement system could not estimate the impact of this increase on local property taxes in her district towns.
“I can’t go back to my towns … I can’t go back to the taxpayers that I promised I would lower your property taxes and vote to raise your property taxpayers,” Dietsch said.
The New Hampshire Retirement Security Coalition said in a statement studies have shown 80 percent of the economic benefit from this COLA would remain in NH.
Sen. Harold French, R-Franklin, said most of the retirees in his district have lower pensions and would get more from a one-time, $500 stipend than a 1.5 percent increase.
But Sen. Kevin Cavanaugh, D-Manchester, said it’s time retirees get an increase they can depend on year after year.
“They want the COLA because they can depend on it,” Cavanaugh added.
Branford police officers once again will earn traditional pensions after the Representative Town Meeting unanimously approved both a new four-year police union contract and a new pension agreement Tuesday night.
Union President Sgt. Stanley Konesky hailed the change, which union members previously ratified, as “just a win-win” for both the union and the town.
“We are extremely pleased with the outcome,” Konesky said after the vote. “It’s beneficial to everyone.”
Police Chief Jonathan Mulhern and Capt. John Alves agreed.
Mulhern said one big problem has been that the current “defined contribution plan,” akin to a 401(k), provided very limited disability coverage — a scary thing to many police officers who know the occupation can be high-risk when it comes to on-the-job injuries.
“It’s huge for us,” said Alves, who runs the department’s recruitment program, which saw a huge jump in applicants after word filtered out that the town planned to switch back from a defined contribution plan to a traditional “defined benefit” pension plan.
The Police Department recently cut its pool of 186 applicants to 70, he said.
Alves said he expected the return to pensions to improve the Police Department’s ability to retain current officers, as well.
“We’ve lost a lot of really good people” who left jobs in Branford to go to other police departments that had pensions, he said.
The move, which had been discussed for several years, was done to stem what has been an increased rate of departure for both experienced officers and relatively new hires and make Branford a more attractive destination for new recruits and transfers from other departments.
The town switched to the defined contribution plan in 2011.
The RTM’s Ways & Means and Public Services committees previously approved both the pension agreement and the labor contract — which will give officers 2.5 percent increases each year — in a joint special meeting.
Tuesday night, Ways and Means Committee Chairman Peter Black, R-3, said the initial cost of the switch to the town is estimated at $25,000, “but we’re also going to save a lot on officer retention.”
“We’re actually going to come out saving a bunch of money,” Black said.
RTM member Tom Brockett, D-7, also called the switch “a win-win” for both the union and the town. He pointed out that over the past few years, the town’s pool of new applicants had dried up, and lateral transfers originally anticipated — experienced officers coming in from other towns — didn’t happen because of a change in state interpretation of the rules.
The state comptroller’s office ruled that if an officer were to retire from a town that was part of the Connecticut Municipal Employees Retirement System, they would have to put their pension on hold if they went to work for another CMERS municipality.
“The return of the defined benefit plan will allow the town to hire better officers and retain more officers,” Brockett said.
Konesky previously said that “the worst part about the situation since 2011 is that for “officers who came here and only had a 401, they had no disability.”
The job “is inherently dangerous,” he said. “God forbid, you get hurt, you have the protection now.”
The Texas legislature passed a bill Thursday aimed at shoring up the state teachers’ pension fund and giving its retired members a standalone bonus.
The bill would increase state contributions to the $154.3 billion Texas Teachers Retirement System by 2% over the next five years and give the retirees a one-time “13thcheck” of a maximum $2,400 by September 2020 in addition to their monthly checks of the same amount.
The original version of the bill, passed in March, would have increased contributions from the state, school districts, and current school employees, while shrinking check 13 down to a $500 cap. The money would have come from $542 million in Texas’ savings account.
The first public pension plan for teachers was established in Manhattan in 1894. In the 1910s, six states established teacher pension plans. More states followed suit and now the overwhelming majority of public school teachers in the United States participate in traditional defined benefit pension plans. These plans have successfully provided a secure and reliable retirement for teachers for decades. Despite their record of success, however, teacher pension plans are under attack nationwide.
You have to give Amazon credit. In a rare public auction, the retail giant promised up to 50,000 jobs at a second headquarters, or “HQ2,” and sat back while 238 cities and states tripped over each other to offer the most lucrative tax break packages. While most of the bids have yet to be disclosed, some are staggering, especially considering the same states have recently claimed they don’t have money for pensions, education, infrastructure, or other state priorities.
Washington, DC – A report released today by the National Public Pension Coalition found that charter schools in certain states are not providing an adequate retirement for their teachers. When charter schools opt out of public pension plans, they instead force teachers into risky 401(k) plans or don’t offer a retirement plan at all. The report found, in all states studied, that charter school teachers would be better off if they were able to join the state’s pension plan.