- Associated Press - Wednesday, December 10, 2014

CONCORD, N.H. (AP) - The New Hampshire State Supreme Court on Wednesday upheld a 3-year-old pension reform law for public employees that shifted more costs onto workers.

The law, which dealt with setting employer contribution rates, was challenged by state employees who argued the Legislature should not interfere with the New Hampshire Retirement System board’s ability to set the rates.

In a unanimous opinion, the court reversed a judge’s ruling that the law violated state and federal constitutions.

The New Hampshire Retirement Security Coalition, which comprises state and municipal employees, including teachers, police and firefighters, said the decision “unfortunately allows public employers to renege on their promise of security in retirement.” It said it was deeply concerned about the long-term impact of the decision.

State Sen. Jeb Bradley of Wolfeboro, who sponsored the measure, said the decision affirms the Legislature’s ability to make changes needed to preserve the retirement system, protect taxpayers, and maintain jobs.

“Unless we can address the $5 billion unfunded liability in our state pension system, both taxpayers and workers would be left with a huge financial burden,” he said.

Prior to the legislative changes, the state had been paying 35 percent of local public employee pension costs, a longstanding practice that was meant to encourage municipalities to participate in the system.

Lawmakers believed that by raising employees’ contribution rates for rising pension costs, the state could stop subsidizing local public employee pension costs without causing municipal contribution rates to spike.

The state Supreme Court wrote, “The narrow question before us is whether, by enacting (the law), the legislature unmistakably intended to establish New Hampshire Retirement System member contribution rates as a contractual right that cannot be modified. We hold that it did not.”

“We preserved a generous pension benefit for public sector workers, and in return asked for slightly higher contributions, asked some younger beneficiaries to work 25 years instead of 20 years, and addressed long-ignored abuses to the system,” state Sen. Sharon Carson of Londonderry said. “This was a first step in ensuring that public sector workers across New Hampshire have a viable pension system for years to come.”

The public pension system covers nearly 50,000 active and about 30,000 retired state and municipal workers, teachers, police and firefighters. It also covers about 8,500 former workers.

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