New Hampshire Retirement System outlines $71M budget and staffing changes for 2026-2027

The House Finance Division I of the New Hampshire Legislature convened on February 19, 2025, to discuss the state budget and various financial matters, focusing particularly on personnel costs and the New Hampshire Retirement System (NHRS).

The meeting began with a review of the proposed budget for the upcoming fiscal years. Representatives noted a significant increase in spending, with a proposed budget of $3,548,000 for the next two years, which is approximately $600,000 more than the previous year's expenditure of $2,928,863. A proposal was made to cut $500,000 from the budget, primarily targeting personnel and benefits, to align spending more closely with actual expenditures.

Discussion ensued regarding the specifics of the budget cuts, with representatives emphasizing the need for clarity on which line items would be affected. It was suggested that the cuts should be distributed across various classes, particularly focusing on personnel costs. The committee requested a detailed plan to implement these cuts effectively.

The NHRS presented its budget, highlighting a statutory administrative budget of $1,313,600,000 for FY '25, with projected increases for the following years. The NHRS officials reported positive funding progress and operational improvements, despite ongoing challenges. They emphasized the importance of addressing deferred initiatives and IT upgrades, which have been a focus over the past five years.

Key highlights from the NHRS included a decrease in employer contribution rates for the second consecutive cycle and a commitment to pay down unfunded liabilities. The NHRS also reported an 8.8% return on investments, outperforming 70% of its peers over the past decade.

The committee raised questions about staffing increases, with NHRS planning to add nine positions in 2026 and three in 2027, primarily in IT to support new software and security measures. Concerns were voiced regarding the justification for these increases, especially in light of the significant budgetary growth.

As the meeting progressed, representatives discussed the implications of proposed health care funding increases and the rationale behind the governor's budget recommendations. The NHRS clarified that the proposed increases were tied to group 2 benefit changes, which have been a topic of legislative focus.

The meeting concluded without making any immediate decisions on the budget, with members agreeing to review the details further before reconvening for a vote. The discussions underscored the complexities of balancing budgetary constraints with the need for adequate staffing and operational improvements within the NHRS.