Trustees Adjust Teacher Payroll Assumption
Jul 11, 2018
The NHRS Board of Trustees voted unanimously on April 10, 2018, to adopt a revised actuarial assumption for payroll growth for Group I teacher members in response to the continued decline in the number of active teachers.
When the Board adopted improved actuarial assumptions in May 2016, the teacher payroll growth assumption was set at 3.0%, lower than the 3.25% assumption for all other member groups (employees, police, and firefighters) to compensate for an anticipated 0.25% annual decrease in the number of active teachers due to the ongoing decline in the state’s school-age population. However, the number of active NHRS teacher members has decreased nearly 5 percent since 2008 and payroll growth has continued to lag expectations. The most recent state population projections from the New Hampshire Office of Strategic Initiatives show a declining school age population through 2025. As a result, the Board voted to reduce the payroll growth assumption for teachers to 2.75%.
The specific impact of this change on employer contribution rates for teachers will not be known until the fiscal year 2017 actuarial valuation is completed later this summer, but it is expected to increase rates by less than one half of one percent of covered payroll.