CONCORD, N.H. (AP) – Hundreds of retirees filled Representatives Hall on Friday to fight for cost-of-living increases in their pensions.

Many, mostly retired teachers, wore red with green stickers urging changes to a House-passed bill to guarantee 2 percent annual increases.

Under the House bill, money for cost-of-living increases will run out in a few years, effectively meaning there would be no further increases for 10 to 20 years, said Rick Trombly, spokesman for NEA-New Hampshire, the teachers’ union.

“I hear more often than not it’s 20 years,” said Trombly.

Lawmakers are struggling to shore up the $5 billion state retirement system, which is only 67 percent funded. They hope to raise that to at least 85 percent, but the proposed changes have upset retirees and employers alike.

The system covers more than 70,000 current and retired government workers, state and local. Estimates are that it is underfunded by more than $3 billion.

The system gets money from three sources: worker contributions, employer contributions and investment returns. For years, employers’ contributions to the system have been too low, a problem compounded by a sharp downturn in the stock market a few years back and projections that turned out to be wrong.

“There’s a history of financial shortcuts that have been reached in this room and the room next door,” Sen. Harold Janeway said of legislative actions over the years.

In effect, the bill would attempt to fix the system over 30 years by infusing money into basic pensions at the expense of a special account that has been used to pay for cost-of-living increases.

Teachers have enough money in the special account for small increases for three years, said Trombly.

“After that, they’d get nothing for 17 years,” he said.

He called the 1 percent increases teachers have gotten in recent years insulting.

“One percent on a pension of $900 per month is almost nothing,” he said.

Trombly endorsed a proposal to guarantee 2 percent annual increases with increased contributions from both employees and employers.

For example, state workers and teachers would contribute 7 percent of their pay to retirement instead of 5 percent, while police officers and firefighters would contribute 13 percent instead of 9.3 percent. Local employers – schools and municipal governments – also would would contribute more. The state’s 35 percent contribution would remain the same.

The contribution increases would pay for the 2 percent cost-of-living increases.

A group of labor organizations, school boards and local governments made the proposal.

“This is an attempt to be fair and moderate,” said Maura Carroll of the New Hampshire Municipal Association.

An alliance of police and firefighters pushed an alternative plan. They said they want the cost-of-living guarantee, but not proposed limits on their pensions that are part of the package. The limits are on what compensation would count in calculating pensions.

Arthur Beaudry, speaking for the New Hampshire Permanent Retired Firefighters Association, said adjustments to the pension system could pay for future cost-of-living increases without new limits on pensions.

Several witnesses at the Senate Executive Departments and Administration Committee hearing, including a spokesman for Gov. John Lynch, urged the Senate to proceed cautiously, perhaps waiting until a proposed study is completed later this year.

Retired state police Col. Paul O’Leary opposed any delay. He said he might not be alive in 20 years if the House bill is adopted and cost-of-living increases stop.

Committee Chairman Peter Burling asked O’Leary if he would be satisfied if lawmakers endorsed automatic increases without specifying an amount until the study is done “with the promise to correct it later.”

“We can’t live on promises,” O’Leary replied.

AP-ES-04-27-07 1555EDT