New Hampshire

Overview

The New Hampshire Retirement System is one of two state retirement systems in New Hampshire, administering retirement benefits for employees of the state, public school teachers, and employees of political subdivisions that have elected to participate. The other state retirement system is the Judicial Retirement Plan, which is administered by the state treasurer’s office and overseen by a seven-member board.
 

Plan Design

Substantially all public employees in New Hampshire participate in a traditional defined benefit plan.

According to the US Government Accountability Office, 84 percent of employees of state and local government in New Hampshire participate in Social Security.

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Authorizing Statutes and Board Structure

New Hampshire Revised Statutes 100-A-2 establishes the New Hampshire Retirement System.

Section 100-A-14 prescribes the NHRS board composition and its duties and responsibilities.

Section 100-A:14-b establishes the Independent Investment Committee, made up of not more than five members of the board.

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

NHRS 100-A-15 establishes the board’s investment standard of care, as follows:

I-a. (a) A trustee, independent investment committee member, or other fiduciary shall discharge duties with respect to the retirement system:
(1) Solely in the interest of the participants and beneficiaries;
(2) For the exclusive purpose of providing benefits to participants and beneficiaries and paying reasonable expenses of administering the system;
(3) With the care, skill, and caution under the circumstances then prevailing which a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose;
(4) Impartially, taking into account any differing interests of participants and beneficiaries;
(5) Incurring only costs that are appropriate and reasonable; and
(6) In accordance with a good-faith interpretation of the law governing the retirement system.
(b) In investing and managing assets of the retirement system pursuant to subparagraph (a), a trustee or independent investment committee member with authority to invest and manage assets:
(1) Shall consider among other circumstances:
(A) General economic conditions;
(B) The possible effect of inflation or deflation;
(C) The role that each investment or course of action plays within the overall portfolio of the retirement system;
(D) The expected total return from income and the appreciation of capital;
(E) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(F) The adequacy of funding for the system based on reasonable actuarial factors;
(2) Shall diversify the investments of the retirement system unless the trustee or independent investment committee member reasonably determines that, because of special circumstances, it is clearly prudent not to do so;
(3) Shall make a reasonable effort to verify facts relevant to the investment and management of assets of a retirement system; and
(4) May invest in any kind of property or type of investment consistent with this section.
(c) The board of trustees shall adopt a statement of investment objectives and policy for the retirement system as provided in subparagraph VII(c).
I-b. Paragraph I-a shall apply to all board members, independent investment committee members, and other fiduciaries, as well as staff and vendors to the extent they exercise any discretionary authority or discretionary control respecting management of the retirement system or exercise any authority or control respecting management or disposition of its assets, or they render investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the retirement system, or have any authority or responsibility to do so, or they have any discretionary authority or discretionary responsibility in the administration of the retirement system.
I-c. The fiduciary obligations of the members of the board of trustees and the independent investment committee are paramount to any other interest a trustee or independent investment committee member may have arising from another role or position that he or she holds, including the position which qualified the person for appointment to the board of trustees or independent investment committee.

Legal Protections of Retirement Benefits

No explicit constitutional protection for public pension benefits, but courts provide protection based on the impairment of contract principles. McKenzie v. City of Berlin, 767 A.2d 396 (N.H. 2000) (holding that city was not permitted to force city employees into the city retirement plan after employees were enrolled in state retirement plan); State Employees' Ass'n of New Hampshire, Inc. v. Belknap County, 448 A.2d 969 (N.H. 1982) (implying waiver of sovereign immunity because legislature gave employees vested right to pension and must provide an appropriate remedy to enforce this right); Gilman v. Cheshire County, 493 A.2d 485 (N.H. 1985) (recognizing that benefits are an integral part of compensation and become vested at the time one becomes a permanent state employee); Cioutier v. State, 42 A.3d 816, 823 (N.H. 2012) (impairment of retired judges contractual rights due to application of amended statutes that modified method of calculating retirement benefits for judges was substantial if it was not offset by compensating benefit); but see In re Concord Teachers (NH. 2009) 969 A.2d 403 (application of statutory 150 percent cap on earnable compensation that was used to compute retirement annuities for those who retired early did not violate Contract Clauses of Federal or State Constitution, as cap did not operate upon collective bargaining agreement's early retirement provision retroactively because it was enacted and became effective before inclusion of early retirement provision within CBA). (NH CONST., Pt. 1, Article 23) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits
 

See also the following search tools:

More Data

• Public Fund Survey Summary of Findings
• Roll Call (NASRA members-only)