CONCORD - Gov. John Lynch has signed a new law aimed at reforming the state Retirement System, helping to ensure its long-term viability and providing cost savings to local taxpayers.

The new law (HB 1645) is an outgrowth of a process that began with the passage of legislation last year and the creation of the Commission to Study the Long Term Viability of the Retirement System. The recommendations of that commission formed the basis for this year’s legislation.

“This is a significant new law that will strengthen the long-term viability of the Retirement System. It’s also an important example of the progress we can make, addressing long-neglected challenges, when we work together,” Gov. Lynch said.

“Our firefighters, police officers, teachers, municipal and state employees serve our citizens with distinction and dedication, which is why it is so important that we take action now to ensure they receive the retirement they’ve earned,” Gov. Lynch said. “This comprehensive law addresses the issues facing the retirement system in a manner that protects local communities and workers.”

Decisions made as far back as the 1980s - about accounting methods, special accounts and investments -created problems with the system’s finances. This new law helps restore the system to solid financial footing, and avoids an employer rate increase of fifty percent or more, which would have occurred without the passage the law.

The law also establishes study commissions that will continue to review the long-term sustainability of retiree medical benefits and cost of living adjustments. These commissions will report their findings and recommendations to the legislature by Dec. 1, 2008.

“I want to thank the members of the House and Senate, particularly the House and Senate Finance and Executive Departments and Administration committees, the members of the committee of conference, and the representatives of the municipalities and the employees who worked extremely hard to find compromise and make progress on this complex issue. I also want to thank the study commission chaired by Bill Bartlett, and retirement system board Chairman Lisa Shapiro for her leadership on this issue,” Gov. Lynch said.

HB 1645 was sponsored by Reps. Daniel Eaton, Alida Millham, Laurie Harding, Neal Kurk; and Sens. Peter Burling and Martha Fuller Clark.