HB1471

NH State Employees’ Association SUPPORT HB 1471 HB 1471 - AS INTRODUCED 2026 SESSION HOUSE BILL 1471 AN ACT relative to changes to the state retirement system. SPONSORS: Rep. Foote, Rock. 13; Rep. Bordes, Belk. 5; Rep. D. Mannion, Rock. 25 COMMITTEE: HOUSE Executive Departments and Administration - Public Hearing: 01/14/2026 01:00 pm at Granite Place Room 231 ———————————————————————————————— ANALYSIS This bill updates the calculation of “average final compensation” for group II retirement system members (police and fire) who began service before July 1, 2011 and were not vested by January 1, 2012, aligning it with the formula adopted in HB 2 (2025). HB 1471, a bill currently before the Legislature, directly affects Group II members who began service before July 1, 2011 and were not vested by January 1, 2012. This bill is a technical correction to last year’s retirement legislation (HB 282 – 2025) and is intended to fix a problem in how Average Final Compensation (AFC) is calculated for certain members. What changed from last year’s bill Last year’s law included a cap on compensation above base salary that relied on an “average percentage over base pay” calculation. While the intent was to prevent pension spiking, that formula turned out to be unclear and difficult to apply, because police compensation is not paid or tracked as a percentage over base. As a result, legitimate extra and special duty (ESD) earnings (details, court duty, special assignments) could be artificially limited, even when those earnings were earned consistently over many years and fully reported by the employer. What HB 1471 does HB 1471 fixes that issue by replacing the unclear percentage-based cap with a clear, dollar-based cap tied specifically to extra and special duty pay, using employer-reported payroll data. The bill: Keeps the highest five-year average used in pension calculations Keeps multi-year averaging to prevent spiking Does not change eligibility or multipliers Does not add new types of compensation What it does change is how the cap is calculated, so it reflects actual earnings, not a theoretical percentage. How this could affect a member’s pension (example) I am NOT an actuary - Here’s a simplified example to show why this matters: Example officer Base salary (highest 5 years): $85,000 Years of service: 25 Pension multiplier: 2.5% Extra & Special Duty (ESD) history after 2012 Early years (limited detail availability): average $4,000/year Later years (consistent details and assignments): average $12,000/year Under the old language - HB 282 (2025) ESD counted toward pension was capped at an average of about $6,000 AFC = $91,000 Annual pension ˜ $56,875 Under HB 1471 ESD cap is based on the average of the last five years, reflecting sustained earnings AFC = $97,000 Annual pension ˜ $60,625 Difference: approximately $3,750 per year, for life. This is not a pension spike. The earnings were: real, earned over multiple years, reported by the employer, and already subject to retirement contributions. Important to understand HB 1471 does not guarantee a higher pension for everyone. Some members will see no change. But for members whose extra duty increased later in their careers, as often happens with seniority and assignment availability, this bill ensures their pension is calculated accurately and fairly. Bottom line HB 1471 is about fixing a flawed calculation, not expanding benefits. It aligns the law with how Group 2 members are actually paid and ensures retirement calculations reflect sustained, legitimate earnings, not distorted math. The NH State Employees’ Association is asking for your support of HB 1471 Thank you. Rich Gulla President - NH State Employees’ Association

This is fair.

Position recorded without written comment.