Pension Privatization Update: House Committee Scopes Out Financial Services Firms

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Today, a legislative committee investigating pension privatization issued a request for information from companies that manage retirement funds.

After pension reform legislation failed to pass last term, House Speaker O’Brien requested that a committee convene over the summer to craft new legislation for next term. The committee will likely propose to move all new public employees to private, defined contribution plans — like a 401(k).

Those already employed by the government would remain in the state-run pension system they are on now.

The idea is to gradually move the state away from the public pension system which is currently facing a $4.2 billion dollar unfunded liability.

Today, that committee has put out a request for information – a lot like a request for proposals – from several financial services companies.  Will Smith, the committee’s chair, says the information they are collecting will help them recommend a company to manage the private retirement plans, should legislation pass:

“the committee will probably recommend a particular financial organization be the one that would be chartered to do that.”

Next, a subcommittee will analyze whether or not the New Hampshire Retirement System can remain viable without the contributions of new employees.