State Employees' Ass'n v. State
161 N.H. 730
| N.H. | 2011Background
- NHRS administers pensions; retirees receive a member annuity and state annuity based on average final compensation.
- RSA 100-A:54, III (Supp.2010) requires monthly premium deductions of $65 per person and $65 per spouse, up to $130 per household, from retirees under 65 receiving RSA 21-I:30 benefits; deductions go to the employee and retiree benefit risk management fund.
- Health benefits under RSA 21-I:30 are voluntary; retirees may opt out; the NHRS can deduct premiums or the DAS can invoice retirees if needed.
- Plaintiffs, SEA and others, filed suit seeking a declaration that RSA 100-A:54, III is unconstitutional under the NH and US Contracts Clauses and Part I, Article 36-a, and sought to enjoin deductions.
- Trial court granted summary judgment for defendants; held premium deduction does not substantially impair vested pension rights and does not violate constitutional provisions.
- On appeal, this Court analyzes whether RSA 100-A:54, III substantially impairs contracts, conflicts with anti-alienation provisions (RSA 100-A:26 and 100-A:26-a), or diverts pension assets in violation of Part I, Article 36-a.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does RSA 100-A:54, III substantially impair vested pension rights? | Plaintiffs allege impairment of full pension rights. | State asserts only a minimal, non-substantial impairment. | Not substantial impairment; no violation. |
| Does RSA 100-A:54, III conflict with anti-alienation provisions (RSA 100-A:26 and 100-A:26-a)? | RSA 100-A:54, III undermines anti-alienation protections and contract rights. | RSA 100-A:54, III is a legislated exception consistent with 100-A:26-a. | Consistent with anti-alienation provisions; does not impair contracts. |
| Does RSA 100-A:54, III violate Part I, Article 36-a by diverting pension funds to fund health benefits? | Deductions divert pension assets to fund health care. | Retirees still receive full pensions; deductions fund benefits rather than State operations. | No diversion of pension funds; complies with Article 36-a. |
Key Cases Cited
- State Employees' Ass'n of N.H. v. Belknap County, 122 N.H. 614 (1982) (vested retirement benefits constitute compensation and become vested; contract-like rights.)
- Furlough v. State, 135 N.H. 625 (1992) (substantial impairment assessed by impact on core contract obligations.)
- Tuttle v. N.H. Med Malpractice Joint Underwriting Assoc., 159 N.H. 627 (2010) (three-part test for contract impairment; balance police power against contract rights.)
- Judicial Retirement Plan, 161 N.H. 49 (2010) (interpretation of Article 36-a; assets used to provide benefits and not diverted.)
- Lippman v. Board of Educ. of Sewanhaka, 66 N.Y.2d 313 (1985) (comparison: premiums altering retirement benefits but not reducing pension amount.)
- Fowler v. Fowler, 116 N.H. 446 (1976) (anti-alienation statute; carve-outs require explicit legislative authorization.)