The Trillion Dollar Gap: New Hampshire

New Hampshire's management of its long-term pension liability is cause for serious concern and the state needs to improve how it handles its retiree health care and other benefit obligations. In 1997, the state's pension plans were 110 percent funded, but by 2008, that number had dropped to 68 percent—well below the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts. Because New Hampshire conducts actuarial valuations for its pension plans on December 31, the current funding level more accurately reflects the decline in assets from the 2008 calendar year than do plans valued on June 30. New Hampshire enacted policy reforms in 2009, increasing the employee contribution rate for new members of the state's retirement system. Meanwhile, New Hampshire has a $3.2 billion bill coming due for retiree health care and other benefits, but only 5 percent of that long-term cost is funded.