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Monday, January 5, 2009

Retirement System Reform back on the table?

Tom Fahey reports that efforts to reform the New Hampshire Retirement System are back on the table, following legislative changes in each of the last two years.
Unions say it's time to stop tinkering with the system, which last summer was $2.7 billion under-funded for its long-term obligations, and let reforms take hold.

"If we keep operating on this patient without allowing time to heal, sooner or later he'll die on the table and I don't think that's something anybody wants," David Lang, president of the Professional Firefighters of New Hampshire, said.

Maura Carroll, legal counsel for the New Hampshire Municipal Association, argued that it makes sense to keep moving. Three years ago, critics said not enough was being done, she noted.

"This doesn't mean you make wholesale changes every year, but that you learn something every year, and if you can make some tweaks to improve the system, you ought to act," she said.

The New Hampshire Retirement System faces two fundamental challenges. It has habitually promised far more generous benefits that it could reasonably provide, and the returns on its investments have been worse than the market average for the past decade. The current economic slump certainly doesn't help, but can in no way be blamed for the shakiness of state pensions.

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