N.H.’s pension fund: three things to know
The N.H. Retirement System is the state’s largest locally organized financial institution, and it may be among the least understood
An “elevator speech” is business jargon for a short pitch used to quickly and simply define a product, service or organization.
If someone were to ask me about the New Hampshire Retirement System, what would my elevator speech sound like? Well, there are really three key things to know about NHRS:
• NHRS provides a modest pension benefit. The current average annual New Hampshire Retirement System pension benefit is just over $19,000 and nearly 70 percent of our 28,000 pension recipients receive less than $25,000 per year.
• While NHRS has a significant unfunded liability, there is a sound plan in place to pay it down through 2039. In addition, public policy factors that substantially contributed to this liability have been addressed through legislation in recent years.
• NHRS benefits have a significant positive impact on the New Hampshire economy. In fiscal year 2012, NHRS paid out more than $550 million in pension benefits. More than 80 percent of our retirees live in New Hampshire – and spend their money here.
Of course, with $6.4 billion in assets, more than 85,000 members and retirees, and a 157-page governing statute, there is much, much more to know about NHRS. However, I believe the three facts above are a useful starting point for anyone interested in understanding the retirement system. And, since I don’t expect to be spending all that much time riding elevators, the retirement system is rolling out “NHRS … Now You Know,” a series of issue briefs designed to provide important background and context about some of the major topics concerning the retirement system.
We’ve also recently posted an explanation of the system’s unfunded liability – what it is, how we got here and, most importantly, how it’s being addressed. Both of these issue briefs are available at nhrs.org/News/HotTopics.
Future installments of “NHRS … Now You Know,” which we plan to release every six to eight weeks, will deal with topics such as investment strategy, how employer rates are determined, and the impact of new Governmental Accounting Standards Board requirements on local financial reporting.
The impetus behind this effort is the recognition that there are a lot of opinions and perspectives out there surrounding public employee pensions. It’s not NHRS’ role to take sides in pension policy debates, but it would be a disservice to the public to ignore them and let the retirement system be defined by those with a particular point of view. Our goal is to improve the dialogue by laying out some key concepts and facts about NHRS in an easy-to-read format that’s accessible to a wide audience.
Based on its membership and assets, the New Hampshire Retirement System is the state’s largest locally organized financial institution. It may also be among the least understood. With “NHRS…Now You Know,” we’re hoping to do something about that. The more everyone understands what the retirement system is all about, the healthier the conversation will be.
George P. Lagos is executive director of the New Hampshire Retirement System.