NH Retirement System to Exceed $1 Billion in Pension Payments in FY 2024; See full list of retirees – InDepthNH.org

With nearly 80 percent of NHRS retirees and beneficiaries living in the Granite State, most of these retirement benefits support local economic activity.

See the list of retirees here

“It is a historic moment for NHRS and for our members and retirees,” said Executive Director Jan Goodwin. “For more than 50 years, these members—many of them our friends, neighbors, and even family members—have served their local communities or the state, educating our children, providing services to residents, and keeping us everyone safe. NHRS is proud to administer their benefits.”

When the June pension benefit payments are released at the end of the month, NHRS will have paid more than $1 billion in pension benefits to about 45,000 retirees and beneficiaries in fiscal year (FY) 2024. The exact numbers will not be available until later this year, after the annual audits are completed. In FY 2023, the retirement system paid $971.1 million in retirement benefits to 43,603 retirees or their beneficiaries.

NHRS pension benefits are funded by member contributions, employer contributions and investment income. Investment returns historically provide the majority of trust fund assets. The fund was valued at $11.51 billion at the end of FY 2023 and was $12.2 billion at March 31, 2024. Ten years ago, NHRS net assets were $7.3 billion. Over the past decade, NHRS investments have achieved an average annual return of 7.9 percent.

Economic impact

“With four out of five retirees still living in New Hampshire, they, in turn, continue to contribute to the state’s economic health,” Goodwin said.

Every pension dollar distributed in the Granite State generated $1.70 in local economic output, according to the Pensionomics 2023 report released by the National Institute for Retirement Security (NIRS). The report, which analyzed data from 2020, estimated that money coming from all state and local pensions paid to New Hampshire residents supported $1.4 billion in total economic output. NHRS is by far the largest defined benefit plan in the state, although some cities have separate plans for some of their employees.

Studies examining the economic impact of defined benefit pension plans have shown how these benefits generate economic activity at different levels:

· Direct influence: When retirees spend their money, it directly stimulates local businesses. For example, a pensioner who dines at a neighborhood restaurant contributes to his income.

· Indirect impact: The restaurant, in turn, uses this revenue to replenish supplies, indirectly benefiting suppliers and distributors.

· Induced impact: Restaurant employees, paid from the same income, use their income to buy groceries or other goods, further circulating the money within the community.

· Social impact: Stable, guaranteed income from pensions received by retirees ensures continued spending, even during economic downturns, and enables many retirees to do volunteer work.

Most NHRS retirees receive a modest pension; approximately 60 percent of NHRS benefit recipients receive an annual benefit of less than $25,000 and more than 90 percent receive a benefit under $50,000. NHRS members are full-time state, county and municipal employees, teachers, police officers and firefighters. Membership consists of two groups: Group I (Staff and Teachers) and Group II (Police and Fire). In FY 2023, the average annual pension across all groups was $22,218. Looking back a decade, as of June 30, 2014, the average annual benefit was $19,407.

AVERAGE PENSION BENEFIT BY GROUP
FY 2023 FY 2014
Employees $15,324 $12,932
Teacher $23,441 $21,401
Police* $39,818 $35,154
Fire* $44,968 $36,562
* Police and fire service members do not participate in social security

“My NHRS pension is two-thirds of my retirement income,” said Nancy Andrews, a former teacher and principal who worked in Hampton, Bedford and Portsmouth. “I combine this pension with social security and some savings to make it possible for me to continue to own my home and pay my living expenses. Each year the cost of my medical insurance has increased and as a result my pension is less. I have no ‘extra money’ beyond my basic expenses to live and maintain my home and health.”

“I am grateful that my 40+ years of service to NHRS have made it possible for me to have a monthly pension so that I can live independently in my own home,” said Andrews. “I hope the NHRS will stay strong. I count on my NHRS pension as a major part of my retirement income.”

Promoting retirement security

Unlike a 401(k)-type benefit, which relies solely on investment performance, a defined benefit plan like NHRS offers guaranteed benefits for life. Many retirees appreciate the security that an annuity provides.

Kate McGovern, who is a retired professor from the NH Bureau of Education and Training, said, “…. I have a special appreciation for my NHRS pension because I have also had the privilege of serving on the NHRS Board and previously on staff at NHRS. I understand how a defined benefit pension provides the retirement security that those who rely on a 401(k) type defined contribution plan unfortunately lack. With the security of my retirement, I have had time to write two books on Lean process improvement while teaching part-time at College Unbound in Providence, Rhode Island.

Anne Burke, who contributed to the retirement system while serving as a school counselor at Souhegan High School for 16 years, said this about her NHRS pension: “My NHRS pension is a very important component of my financial solvency. Since I have worked in higher education for most of my career, the NHRS pension is not my only source of income, but I wouldn’t sleep at night without it. With some of my other retirement funds still in active investment, it is reassuring to have a resource that is guaranteed over time.”

Pam Smarling, a retired researcher on the NH House committee, said, “My retirement has allowed me to focus on spending time doing the things I love to do, which include volunteering in my community, enjoying the outdoors and traveling. in retirement, my husband and I have biked through British Columbia, gone on safari in Tanzania, and cruised the Greek islands.”

Maj. Ernest Loomis, who joined the NH State Police in 1963, said, “Thank you NHRS, for your diligence and continuing to strengthen a system that has been under almost constant attack from various sources.”

Goodwin, who has served as Executive Director since 2021, reflected on how far NHRS has come.

“Since 1967, the retirement system has grown its membership and assets from its humble beginnings as a $98 million pension fund,” Goodwin said. “According to a 2024 study by AARP, 20 percent of American adults age 50 and older have no retirement savings, and more than 60 percent are worried they won’t have enough money to supported in retirement. NHRS Guaranteed Lifetime Benefit helps ensure financial stability for our members.”

“We are delighted to celebrate this moment in NHRS history.”

Similar links

NHRS Benefits by County, FY 2023:
https://www.nhrs.org/docs/default-source/reports-and-valuations/other-reports/county-benefit-map-fy-2023.pdf

Pensionomics 2023 – NH data:
https://www.nirsonline.org/wp-content/uploads/2023/01/pensionomics2023_NH.pdf

Pensionomics 2023 – Full report:
https://www.nirsonline.org/reports/pensionomics2023/

About NHRS

NHRS provides retirement, disability and death benefits to its eligible members and their beneficiaries. New Hampshire State and more than 460 local government employers participate in NHRS for their employees, teachers, firefighters and police officers. NHRS has approximately 48,500 active members and 43,500 benefit recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code.