I. All of the assets of the judicial retirement plan shall be credited, according to the purpose for which they are held, between 2 funds, namely, the member annuity savings fund and the state annuity accumulation fund. In making the determinations required under this section for financing the judicial retirement plan, the board shall determine and use an appropriate actuarial funding methodology. The board shall direct the plan’s actuary to prepare biennial valuations of the system’s assets and liabilities commencing with a valuation prepared as of the date of implementation of this chapter. Such biennial valuation shall be the sole basis for determining the annual contribution requirements of the judicial retirement plan until the next following biennial valuation.
II. Member Annuity Savings Fund.
(a) The member annuity savings fund shall be a fund in which shall be accumulated the contributions deducted from the compensation of members to provide for their member annuities. The board of trustees shall certify to the proper authority responsible for making up the payroll of the judicial branch, and such authority shall cause to be deducted from the compensation of each member, on each and every payroll for each and every payroll period, the percentage of earnable compensation applicable to such member. In determining the amount earnable by a member in a payroll period, the board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period and it may omit deduction from compensation for any period less than a full payroll period if such person was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed
1/10 of one percent of the annual earnable compensation upon the basis of which such deduction is made. The amounts deducted shall be reported to the board. Each of such amounts, when deducted, shall be paid to the judicial retirement plan at such times as may be designated by the board and credited to the individual account, in the member annuity savings fund, of the member from whose compensation the deduction was made.
(b) Every member shall be deemed to consent and agree to the deductions provided in this section as a condition of membership.
(c) The accumulated contributions of a member withdrawn by such member, or paid to such member’s estate or to such member’s designated beneficiary in event of the member’s death in service, shall be paid from the member annuity savings fund. Upon the retirement of a member, such member’s accumulated contributions shall be transferred from the member annuity savings fund to the state annuity accumulation fund.
III. State Annuity Accumulation Fund.
(a) The state annuity accumulation fund shall be the fund in which shall be accumulated all reserves for the payment of all state annuities payable from contributions made by the state, any amounts transferred to the fund from a similar fund under one or more of the predecessor systems, and amounts transferred from the member annuity savings fund and from which shall be paid all benefits payable under the plan other than those payable from the member annuity savings fund.
(b) The contributions of the state for benefits under the judicial retirement plan shall consist of a percentage of the earnable compensation of its members to be known as the “normal contribution,” and an additional amount to be known as the “accrued liability contribution.” The rate percent of such normal contribution in each instance shall be fixed on the basis of the liabilities of the plan with respect to its members.
(c) Commencing with the valuation as required in paragraph I, the actuary in determining the percentage normal contribution rate may include a projection of the membership, earnable compensation, and assets of the judicial retirement plan from the valuation date to the beginning of the year to which such percentage normal contribution rate is applicable; or the actuary may base such determination on the anticipated level of contribution as is necessary to maintain such reasonable actuarial funded ratio as may be directed by the board of trustees, and for purposes of this determination the actuarial funded ratio shall be the ratio of the fair market value of the judicial retirement plan’s assets to the present value of accumulated benefits under the judicial retirement plan for all members, but without regard to any future compensation increase.
(d) Immediately following the actuarial valuation prepared under paragraph I, the board shall have an actuary determine the amount of the unfunded accrued liability as the amount of the total liabilities of the state annuity accumulation fund which is not dischargeable by the total of the funds in hand to the credit of the state annuity accumulation fund, and the normal contributions to be made on account of the members during the remainder of their active service. The amount so determined shall be known as the “unfunded accrued liability.” On the basis of the unfunded accrued liability, the board shall have an actuary determine the level annual contribution required to discharge such amount over a period of 30 years from January 1, 2010 or the maximum period allowed by standards adopted by the Government Accounting Standards Board, whichever is less.
(e) The total amount payable to the state annuity accumulation fund in each year shall not be less than the normal contribution rate multiplied by the total compensation earnable by all members for such year, plus the amount of the accrued liability contribution necessary to liquidate the unfunded accrued liability as determined by the actuary under subparagraph (d) above.
(f) All interest and dividends earned on the funds of the judicial retirement plan shall be credited to the state annuity accumulation fund. The board shall allow interest at such rate or rates as it shall determine from time to time on the individual accounts of members in the member annuity savings fund and shall annually transfer such interest amount from the state annuity accumulation fund. Such interest shall be compounded annually or more frequently as the board of trustees may determine and shall be allowed to the date of processing upon termination of active service for any reason including withdrawal, retirement, or death.
(g) The board of trustees shall be permitted to pay out to, or for the benefit of, retired members retired after January 1, 2005 or their beneficiaries, supplemental benefits as provided in N.H. Rev. Stat. § 100-C:17, not to exceed $50,000 in the aggregate per calendar year. Said benefits shall be on a nonrecurring basis. Supplemental benefits greater than $50,000 per calendar year in the aggregate shall only be paid if the judicial retirement annuity accumulation fund earns at a level greater than the actuarial assumed rate of return approved by the board and the trust is at least 90 percent funded for that calendar year.
IV. State Contributions. On or before the first day of October preceding each regular session of the state legislature, the board of trustees shall certify to the commissioner of administrative services the amounts which will become due and payable by the state during the biennium next following to the judicial retirement plan and it shall be the duty of the commissioner of administrative services in preparing the executive budget for each ensuing biennium to include in the budget the amounts so certified which amounts shall be appropriated by the legislature. The amounts so certified under this paragraph shall include the unfunded accrued liability of the judicial retirement plan; provided, however, that if bonds are issued to fund or eliminate the unfunded accrued liability, the payments of principal and interest for the bonds or notes shall be made from the general fund.