HOUSE OF REPRESENTATIVES             H.C.R. NO.59          
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE CONCURRENT
                        RESOLUTION

CONVENING A BLUE RIBBON COMMISSION TO REVIEW AND EVALUATE PENSION
   AND RETIREMENT BENEFITS FOR ALL MEMBERS OF THE EMPLOYEES'
   RETIREMENT SYSTEM.



 1       WHEREAS, the Employees' Retirement System (ERS) was
 2   established in 1926 to provide retirement allowances and other
 3   benefits to state and county government employees; and
 4   
 5       WHEREAS, since its inception, the ERS has experienced rapid
 6   growth in membership, benefit payments, and assets; and
 7   
 8       WHEREAS, according to the ERS's "Comprehensive Annual
 9   Financial Report for the Fiscal Year Ended June 30, 1998," as
10   of March 31, 1998, ERS' membership was comprised of 57,797
11   active members, 2,650 inactive vested members, and 27,403
12   retirees and beneficiaries and, as of June 30, 1998, a total of
13   $426,926,149 in benefit payments were made; and
14   
15       WHEREAS, as of June 30, 1998, the market value of the net
16   assets held in the broadly diversified ERS investment portfolio
17   was over $9 billion; and
18   
19       WHEREAS, numerous changes have been made to the ERS law
20   since 1926; for example, beginning in 1984, all new employees
21   became noncontributory, instead of contributory, members of the
22   ERS; and
23   
24       WHEREAS, in addition, because of the variety of positions
25   included within the ERS, different kinds of benefits are
26   offered to certain individuals for various reasons; and
27   
28       WHEREAS, for example, certain groups of individuals have
29   gradually been included as contributory members, such as
30   certain law and safety enforcement officers, including
31   corrections officers, narcotics enforcement investigators, and
32   water safety officers; and
33   
34       WHEREAS, during its 70-year history, numerous piecemeal
35   changes have been made to the ERS; however, since there has
36   been no sweeping reform to update obsolete or unnecessary
37   portions of the law, the existing law is labyrinthine and
38   incomprehensible to all but a few individuals; and

 
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 1       WHEREAS, a comprehensive study is needed to review and
 2   evaluate the pension and retirement benefits for all members of
 3   the ERS to ensure that:
 4   
 5       (1)  Hawaii's public servants receive an adequate annual
 6            income on a timely basis when they retire from
 7            government service;
 8   
 9       (2)  The ERS administration readily provides information to
10            its members, pensioners, and beneficiaries; and
11   
12       (3)  The ERS is prudently investing assets to generate the
13            highest possible rate of return;
14   
15   now, therefore,
16   
17       BE IT RESOLVED by the House of Representatives of the
18   Twentieth Legislature of the State of Hawaii, Regular Session
19   of 1999, the Senate concurring, that the Governor is requested
20   to convene a one-year Blue Ribbon Commission (Commission) to
21   review and evaluate pension and retirement benefits for all
22   members of the ERS; and
23   
24       BE IT FURTHER RESOLVED that the Commission shall consist of
25   seven members to be appointed by the Governor as follows:
26   
27       (1)  Two members from a list of candidates nominated by the
28            President of the Senate;
29   
30       (2)  Two members from a list of candidates nominated by the
31            Speaker of the House of Representatives; and
32   
33       (3)  Three members chosen by the Governor;
34   
35   and
36   
37       BE IT FURTHER RESOLVED that the members of the Commission
38   represent a broad cross-section of the community, including at
39   least one representative familiar with each of the following
40   areas:
41   
42       (1)  Personnel, collective bargaining, and labor law;
43   
44       (2)  Financial planning and pension and retirement systems;
45   
46       (3)  Business and management; and
47   
48       (4)  Government employment;
49   
50   and

 
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 1       BE IT FURTHER RESOLVED that the Commission, with the
 2   cooperation of the ERS, shall:
 3   
 4       (1)  Review and evaluate the State's existing pension and
 5            retirement law;
 6   
 7       (2)  Compare Hawaii's retirement system with retirement
 8            systems in other states;
 9   
10       (3)  Compare Hawaii's retirement system with retirement
11            systems in the private sector; and
12   
13       (4)  Make recommendations, including proposed legislation
14            to reform the ERS law;
15   
16   and
17   
18       BE IT FURTHER RESOLVED that the Legislative Reference
19   Bureau provide administrative support to the Commission
20   including the preparation of a comprehensive study reviewing
21   and comparing the public pension and retirement systems in all
22   fifty states; and
23   
24       BE IT FURTHER RESOLVED that the Commission submit a report
25   with its findings and recommendations, including proposed
26   legislation, if necessary, to the Legislature no later than
27   twenty days before the convening of the Regular Session of
28   2000; and
29   
30       BE IT FURTHER RESOLVED that certified copies of this
31   Concurrent Resolution be transmitted to the Governor, the
32   Administrator of the Employees' Retirement System, and the
33   Director of the Legislative Reference Bureau.
34   
35 
36 
37 
38                         OFFERED BY:  ____________________________
39