Facing a $4 billion unfunded liability in its retirement system, New Hampshire is getting ready to introduce pension reform measures in the 2012 session. As they gear up, the Speaker of the NH House, William O’Brien, invited “National pension reform leader” Dan Liljenquist to address a special committee.
The New Hampshire “Union Leader”, well-known for their political punditry, covered Senator Liljenquist’s presentation. They write:
The 2008 stock market crash was a disaster for the once fully funded Utah state retirement system, but it set the stage to change the system from a defined benefit to a defined contribution system.
The main architect of the change, Utah state Sen. Dan Liljenquist, briefed the New Hampshire House Special Committee on Public Employee Pensions Reform Tuesday. He talked about changes made to Utah’s system as New Hampshire lawmakers decide if reforms enacted this year and several years ago will be enough to put its system on solid ground.
A special legislative committee released a report last month recommending two retirement systems, one for current workers, and one for those hired after the new plan goes into effect.
Some lawmakers want to pass a law this spring switching all new public workers into a 401(k) plan meant for public employees.
The plan would be a defined contribution plan, where the level of money going into the plan is pre-determined. A defined benefit plan delivers a set of promised benefits in retirement no matter how the financial winds change over time.
The New Hampshire Retirement System is a defined benefit plan.
Senator Liljenquist was also interviewed by a local blogger.
[youtube http://www.youtube.com/watch?v=_lPUo3Ll-f0&w=560&h=315]
As Senator Liljenquist is fond of saying, these are not partisan issues – these are reality issues. And “reality is not negotiable.” That is why Rhode Island – a Democrat-dominated state – has joined Utah and other states in reforming their pension programs. RI Treasurer, Gina Raimondo, was the architect behind that state’s reforms and spent months consulting with Senator Liljenquist on Utah’s model. Both Raimondo and Liljenquist spoke this week to the Harvard Kennedy School of Government on their reforms. Pension reform will be a top priority for multiple states in the 2012 legislative session.
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