The government of US town, Milford, is considering pulling out from the New Hampshire Retirement System (NHRS) because of its funding level.
The proposal was considered last month in a meeting of the Board of Selectmen, which decided to investigate what might be required to exit from the NHRS. Dannis said the NHRS was grossly underfunded and in the worst decile among government plans in the US.
The minutes of the Milford Board of Selectmen meeting said the Board could expect more than a doubling of the town's expenses before there were any reforms. "It uses unrealistic long term return assumptions, which has the effect of understating the pension plan's financial hole," said Dannis.
The financial weaknesses of the NHRS have been well documented. Dennis Delay, deputy director of the New Hampshire Center for Public Policy Studies, said in a report entitled, New Hampshire's Retirement System Public Pension Predicament, published in September this year, the state's obligation to the NHRS was the second biggest driver of the New Hampshire State Budget.
Delay said: "State obligations to the NHRS are certain to grow. Despite increased state contributions, the trust fund unfunded pension obligation is $2.5bn and climbing."
The NHRS was unavailable to comment.