Last week two well-known credit rating agencies, Standard & Poor’s, and Moody’s, downgraded the state of NH’s credit rating. Just what does that mean? It means financial experts do not believe NH has the ability or political will to make good on its debts – the state is a bad credit risk. At last, the state’s practice of meeting its financial and social obligations only when sued has caught up with it.
One of the factors cited for the downgrade was the funding liability of the New Hampshire Retirement System (NHRS), which has less than 60 percent of the money it needs to meet future obligations.
Despite the unfunded liability and the effect it has had on the state’s financial reputation and ability to borrow funds in the future, the administration at NHRS is willing to spend lavishly on unnecessary and costly legal fees.
It was announced at the NHRS Board of Trustees meeting in April that on May 13, the trustees will vote on whether to pursue an appeal with the NH Supreme Court to overturn a recent ruling from the Public Employee Labor Relations Board (PELRB). The PELRB ruling was made in response to SEA/SEIU Local 1984 opposing a petition NHRS made of the PELRB to modify the unit. In that petition to modify the unit, NHRS sought to arbitrarily exclude nine positions from the NHRS bargaining unit. (Read about the rights that would have been stripped away from these workers here.) The PELRB ruled in favor of eight of the nine workers who would have been stripped of the rights and protections of the collectively bargained agreement. NHRS’ petition for modification of the unit was, with the exception of one position, denied.
Rather than accept the PELRB decision, NHRS is considering a pricey appeal that will be paid by dollars that should be going to public retirees who have not seen a cost of living adjustment in their pension checks for years.
A suit like this can cost the pension fund thousands of dollars. Is this a wise use of the retirees’ pension money?
We asked SEA/SEIU Local 1984 Board member and NHRS Trustee Germano Martins if he thought this is a wise expenditure considering the funding liability
Germano’s Response: “No it is not. But it is more than likely the board will in fact take up this vote. If they do, I expect they will have more than enough votes needed to pass it. Remember, this is a new board composed to have minimum employee input, and sometimes none at all. Of the 13 member board, employees have only four positions. I do not know any public employee pension system in the country where the employees have only four of a total of 13 positions. Show me one even. Looking strictly from the point of view of the exercise of my fiduciary duty to protect the pensions’ fund, this is a horrible investment, one that has zero return on the dollar invested, which by the way can be $20,000 and up.
This request to remove these nine positions was already reviewed and decided by the Public Employee Labor Relations Board. The PELRB gave valid reasons for denying the NHRS’ attempt to strip these nine workers of their legal rights. Money needed to pay to retirees should not be used to strip workers’ rights.
The future will tell, either way, we will be talking about this for a real long time, if this is passed, because this is a huge waste of money at a time when we should be watching our expenditures closely and concentrating instead on meeting our investments’ benchmarks. A brand new law suit like this will accomplish neither. We can’t afford it.”
Note: The NHRS petition to modify the bargaining unit sought to remove the positions of Retiree Services Team Lead, Controller, Employer Auditing Team Lead, Employer Reporting Team Lead, Member Accounts Team Lead, Process Improvement Manager, Project Manager, Regulatory Compliance Officer/Staff Attorney, Human Resources Manager and Public Information Officer.
SEA/SEIU Local 1984 agreed that the Human Resources Manager should be excluded from the bargaining unit. The PELRB ruled that the Regulatory Compliance Officer/Staff Attorney was excluded from the bargaining unit and the remaining positions were properly in the bargaining unit.