CONCORD, N.H. – New Hampshire workers considering retiring in the face of almost certain changes to benefits provided by the public pension system now would have until Jan. 1 to become vested and avoid being affected by most of the changes under a tentative agreement reached by House and Senate negotiators Friday.

House and Senate negotiators working on changes to the public pension system agreed Friday to change the date most reforms would affect vested workers to Jan. 1 from Dec. 1. Negotiators are returning to the table Tuesday to continue work toward a compromise on the reform bill.

Negotiators initially agreed to the Dec. 1 date after hundreds of workers began filing for retirement, not knowing what pension changes might affect them if the law changed July 1.

Negotiators wanted the workers to hold off until they could assess how the benefit changes affected them.

Negotiators have been meeting to discuss proposed plans that would increase the cost of pensions for firefighters, police, and state and municipal workers.

The plans are intended to spare property taxpayers the rising costs of funding the pension system.

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Negotiators agreed to change the date most reforms would affect workers who have the 10 years in the retirement system needed to be vested. Under Friday’s agreement, they would have until Jan. 1 to reach the 10-year mark. The change would give the New Hampshire Retirement System six months to prepare for the reforms assuming the bill became law July 1.

In earlier negotiations, the two sides agreed that vested workers would pay higher pension contributions beginning July 1, but changes would only apply to those hired after that date.

The public pension system covers more than 50,000 active and nearly 26,000 retired state and municipal workers, teachers, police and firefighters.

Negotiators propose raising active employees’ contribution rates on July 1 to ease the burden on employers.

Teachers, state and municipal workers would pay 7 percent instead of 5 percent.

Firefighters’ contribution would rise from 9.3 percent to 11.8 percent. Police would pay 11.55 percent instead of 9.3 percent.

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Many of the proposed changes agreed to so far would only affect workers hired after July 1. For example, newly hired state workers, municipal workers and teachers could not collect retirement benefits until age 65 even if they retired earlier. Currently, the workers can retire before age 65 and get a reduced pension.

Newly hired police and firefighters could not begin collecting a pension until age 52½ even though they could retire at age 50.

Newly hired workers and workers who don’t have 10 years in the system on Jan. 1 would see earnings used in pension calculations averaged over their five highest paid years instead of three years, which is the current practice.

Negotiators have been trying to limit spikes in pension benefits paid to police who are paid for extra special duty assignments.

 


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