In this case, the Court dealt with the issue of whether an amendment to RSA 100-A, governing the New Hampshire Retirement System (NHRS), unconstitutionally violates retired state employees' vested contractual rights. It could be the first in a series of such cases as the legislature addresses reform of NHRS and other statutory public employment benefits.
In addition to pensions under RSA 100-A, the State provides medical and surgical benefits to eligible retirees and their spouses through a separate program under RSA 21-I, administered by the Department of Administrative Services (DAS). Formerly the State paid the full healthcare premium. In 2009 the legislature amended RSA 100-A:54 to provide that NHRS shall deduct the premium contribution amounts of $65 per retiree and $65 per spouse and pay the money into the fund administered by DAS. The State Employees' Association and four retired state employees brought suit, claiming that RSA 100-A:54, III unconstitutionally impairs their vested contractual rights to receive the full amount of their pension benefits under Part 1, Article 23 of the New Hampshire Constitution and Article 1, section 10 of the United States Constitution. The trial court rejected the plaintiffs' claim.
The Supreme Court first observed that the Contract Clauses of the New Hampshire Constitution and the United States Constitution "afford equivalent protections where a law impairs a contract, or where a law abrogates an earlier statute that is itself a contract." Under both Contract Clauses the constitutional analysis "has three components: whether there is a contractual relationship, whether a change in law impairs that contractual relationship, and whether the impairment is substantial." There was no issue as to the retirees' rights to receive their pensions. The issue was whether RSA 100-A:54, III substantially impairs these rights by automatically diverting money for healthcare premiums. Noting that the retirees, having chosen to accept the health benefit, are obligated to pay for it, the Court held that automatic deduction of healthcare premiums does not substantially impair the retirees' vested rights to a full pension.