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Retirement system warns House budget cuts would stall IT and service upgrades; system is self-funded
Summary
New Hampshire Retirement System leaders told the committee that House back-of-the-budget reductions would cut $4.2M–$4.4M from the system’s operating plan, impairing planned IT upgrades, cybersecurity and member services; the system’s operating funds come from trust assets, not general funds.
Jan Goodwin, executive director of the New Hampshire Retirement System (NHRS), and Marie Mullen, director of finance, presented the system’s financial position and effects of a House back-of-the-budget reduction.
Goodwin said NHRS’s net assets were approximately $12.3 billion as of June 30, 2024, and noted the fund’s funded ratio has improved in recent years. The system’s actuarially assumed rate of return remains at 6.75% following a recent experience study, she said.
Mullen explained the system’s operating budget is funded from trust assets and does not draw on state general funds. The House, she said, approved a back-of-the-budget reduction that cuts roughly $4.2 million in FY26 and $4.4 million in FY27 from the NHRS operating plan. Because the budget is funded from trust assets, Mullen said, the House reduction does not free up general-fund dollars but does reduce the retirement system’s planned operating expenditures and would delay or cancel planned IT, cybersecurity and modernization projects.
NHRS staff listed planned items affected by the House reduction: an upgraded financial system and GASB reporting tools, website and ADA compliance work, a member-portal modernization and additional security measures including advanced encryption and stronger authentication. The system said software changes to implement legislative benefit changes can cost several hundred thousand dollars, not including internal staff time.
NHRS asked the committee to restore the House reductions, emphasizing the proposed cuts would hamper post-implementation improvements after a multi-year pension-administration-system replacement and would affect service levels for members and employers. Committee members asked clarifying questions about how group-2 funding proposals in other legislation interact with employer rates and the system’s amortization schedule; NHRS staff provided actuarial context and estimates for employer-rate impacts of benefit changes.
