Governor Lynch’s nomination of David McCrillis, Newport, to the Board of Trustees of the New Hampshire Retirement System, received the approval of the five-member Executive Council at their regular meeting on Wednesday.
State retirement systems across the country are under stress and New Hampshire has its problems, too. Generous retirement and health benefit packages promised to state and local government workers have been underfunded. Retirement systems often undercharged local and state governments and many states counted on investment rates of return too high for markets to reach.
A recent national report by the State Budget Crisis Task Force said "when money is withheld from a pension fund, the arrears snowball, because most states count on money compounding at a rate of about 8 percent a year. Eventually the unfunded liability grows unmanageable."
David McCrillis and his fellow Retirement System trustees face plenty of issues not the least is maintaining credibility with the legislature. There are many ideas in the State House of how to change things but there needs to be a full understanding of the near and long term consequences of legislative changes to the system.
I am confident David will be an excellent trustee. He will be one of 13 trustees and one of the four public, non retirement system members. He brings the perspective from a part of the state often not represented on key boards and commissions. His more than two decades of experience with the 122 year old family insurance firm, McCrillis and Eldredge, will be invaluable.
David has been an important community leader including many years as a Newport firefighter. Now he is stepping up to serve on a crucially important state board that impacts state and local government workers, local property tax payers, state budget writers, and of course, retirees.
The New Hampshire Retirement System paid out $10 million per week in 2011 to 27,130 retirees or their beneficiaries. That is more than one-half a billion dollars payout annually making the NHRS payouts one of the largest salary programs in the state.
Established in 1967, the retirement system was valued at $5.9 billion at the end of June last year, up 23 percent from the prior year thanks mostly to a rising stock market. While fiscal year 2011 was a good, the preliminary numbers for fiscal year 2012 show growth at a paltry 0.7 percent. The system operates with an assumed rate of return of 7.75 percent each year averaged over the long term.
In New Hampshire, there is general agreement that the state retirement system is underfunded. Actuaries say the NHRS is 57.4 percent funded. That means of anticipated obligations based on promised benefits, the money is there for 57.4 percent of our commitments. According to NHRS documents, to be considered healthy, a plan needs to be 80 percent funded. The gap between current status and a healthy plan for New Hampshire is in the billions of dollars.
The system has 84,600 members. About 50,000 of the members are "active," working and paying their share into the system while the rest are retirees receiving benefits or former employees who are vested in the system. The members of the system are state, county and municipal employees, teachers, police officers and firefighters.
While David McCrillis works on the challenges in the state retirement system from his NHRS trustee position, the new legislature and new governor will also be looking for ways to improve the current situation.
Last year, Governor Lynch appointed me to fill one of the positions he is responsible for on the board of trustees of the New Hampshire Humanities Council. At my first meeting, in September, 2011, the initial presentation was from Jim Garvin, retired state architecture historian. He reported on a video that was being developed to tell the story of the 225 year old meetinghouse in Washington, NH.
On Saturday, the history of the continuous use of the Washington Meetinghouse for many varied purposes was celebrated by townspeople and visitors at a day-long series of events. It was capped off by a dinner at Camp Morgan and a celebratory presentation of the 55 minute video, Meetinghouse, The Heart of Washington, New Hampshire, which beautifully highlights the story of the meetinghouse since 1787.
The protection, maintenance and restoration of beautiful, unique and historically significant public buildings is important. The buildings tie the past to the present and allow us to continue traditional or new uses for these old structures. The Washington Meetinghouse is one of only three meetinghouses in New Hampshire that still serve as their community’s town hall.
The Washington town center is one of the most photographed spots in New Hampshire. A picture pulls together the school building, Congregational Church and the meetinghouse and reflects the story of how towns like Washington conducted their public business, educated their children and joined together for worship and social events.
A grant from the Humanities Council helped make the video possible. That grant and others were provided in recognition of the unique importance of the Washington Meetinghouse and its very rich history. It was a very exciting and informative evening for the viewers on Saturday night. Congratulations to everyone who participated in creating the video and for the wonderful celebration of the Washington Meetinghouse.