(CONCORD) The Board of Trustees of the New Hampshire Retirement System has dropped a legal challenge to parts of the state budget. According to a statement released by the Board this afternoon, it actually voted to drop the lawsuit in Merrimack County Superior Court in a non-public session on September 13th, but didn’t release the decision until now.

“Because the motion required the consent of the NH Attorney General’s office to take effect, the decision not to pursue the lawsuit was not made public until NHRS received notice of the State’s assent to the particular type of withdrawal – referred to as neither party docket markings.”

On June 28th, the Board of Trustees challenged a section of House Bill 2 containing reforms to the New Hampshire Retirement System. The contested provision lowered the expected rate of return on Retirement System assets from 8.5% to 7.75% annually. The lawsuit claimed that the Legislature lacks authority to make such detailed decisions. HB 2 also changed the composition of the NHRS Board, cutting the number of seats reserved for state and local employees from 8 to 4. The newly constituted Board voted last week to drop its challenge.

However, the NHRS Board maintains the right to set financial policy independent of the Legislature, but is dropping the case because it no longer wants to increase the expected rate of return. Lacking specific relief, the Court would determine that the case was moot, as it did last week to a legal challenge to Speaker Bill O’Brien’s decision to temporarily close the doors of the House Gallery.

“The Board does not retreat from the legal position it has taken in this action; it simply concluded that there is no relief it wishes the Court to order at this time. The retirement system’s consulting actuary will soon be developing draft employer contribution rates for Fiscal Years 2014 and 2015, which the Board will certify in September 2012.”

The Court must still consider a separate lawsuit filed by several public employee unions challenging other aspects of the Retirement System reforms.