, Derry, New Hampshire

September 20, 2012

Rising retirement costs strain budgets

By James Niedzinski

---- — LONDONDERRY — Concerns began to rise during a School Board meeting last week.

A recent state Supreme Court ruling said the state is not legally obligated to keep paying into retirement funds.

In the past, the state has funded 35 percent of the retirement fund for town employees. Last year, that was reduced to 25 percent — and this year it could be even less.

The total amount cut from the retirement program could be as much as $1.1 million, School Board member Stephen Young said.

The state funding reduction will not only affect the Londonderry School District in Londonderry, but districts and municipalities statewide.

“We basically have three options,” School Board Chairman John Laferriere said. “The town could raise taxes, cut services and programs, or we could do a little bit of both.”

The town is required to contribute into retirement funds, and will have to come up with the difference once Gov. John Lynch releases his budget.

The effects of the retirement fund cut are already happening, and will only get more severe, Superintendent Nathan Greenberg said.

The issue also came up during a Town Council meeting earlier this year, where state Reps. Ken Hawkins and Betsy McKinney addressed the council.

The representatives said different departments were already contributing far too much to retirement funds.

“We promised too many benefits,” Hawkins said during the Town Council meeting. “We are not collecting enough money to pay for those benefits.”

Right now, departments are trying to get as much information for individual budgets as possible, to see where they stand.

This would not be the first time the town or the state has been in a budget crisis.

“I’m afraid we will end up in a situation like we did two years ago,” Laferriere said. “It was a close call when we had to have a special election to support our system.”

While some board members sympathized with the state for wanting to save money, there needs to be a solution, Young said.