Retirement system relief bill passed over by Senate A&R

A bill that would allow participants in the County Employees Retirement System to stretch out increased payments to the system over 10 years instead of five has been passed over by the Senate A&R Committee.

House Bill 117 is being pushed by cities, counties and school boards to help ease the immediate impact of increasing payments into the system for health insurance benefits, but would cost those entities more over the long term.

Under the bill, the first few annual payments made by local governments and school boards would be lower, but they would pay a combined $120 million more over the 10 years than if they stuck to the five-year plan.

“It must be understood … that our school board members, our mayors and our judges understand this issue,” Rep. Mike Cherry, the bill’s sponsor, told the committee. “They are asking to change the terms slightly. … They understand that they are going to have to pay more in the long run.”

That amounts to poor fiscal policy, particularly since economic recovery in the next several years isn’t certain, said Sen. Robert Stivers, a Manchester Republican.

Stivers noted that the General Assembly acted last year during special session to increase the payments the state makes into its retirement system after years of underfunding. That action helped dig the state out of a fiscal hole it had dug by not making the actuarially required payments into the system for years, Stivers said.

“We’re walking down the street and picking up shovels and digging another hole for somebody else,” Stivers said about House Bill 117. “We are just waiting for the day to pay the piper.”

Committee Chairman Sen. Charlie Borders didn’t call a vote on the bill, and Cherry said after the meeting that he wasn’t sure if the measure would be called for a vote this session, which has five working days remaining.

The bill has already passed the House, but would need to pass the committee and the full Senate by the time the session ends.

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