STAND

 

STAND. COM. REP. NO. 175-06

Honolulu, Hawaii

, 2006

RE: H.B. No. 2310

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred H.B. No. 2310 entitled:

"A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM,"

begs leave to report as follows:

The purpose of this bill is to clarify and conform existing statutory language regarding the Employees' Retirement System (ERS) to current practices. Among other things, this bill:

(1) Allows former contributory plan members whose accumulated contribution balances are more than $1,000 to leave their contributions in the ERS until they reach the age of 62;

(2) Requires the filing of accidental and ordinary death benefit claims within three years of a member's death;

(3) Allows former employees with vested contributory plan rights to withdraw their contributions at any time;

(4) Allows the Board of Trustees of the ERS to use limited liability companies as an investment vehicle;

(5) Establishes a deadline for employer contributions and requires payment of interest by the employer on late contributions for members who are called to active military duty;

(6) Clarifies that ordinary death benefits are payable to a beneficiary if a member with vested status dies before they are eligible to retire while on active military duty;

(7) Gives members who are out of state on active military duty additional time to make the Hybrid Plan election;

(8) Eliminates the June 30, 2006, deadline by which members must claim noncontributory plan membership service in order for such service to be eligible for conversion to the Hybrid Plan membership service since no ruling has yet been received from the Internal Revenue Service;

(9) Clarifies selection and irrevocability of beneficiary designations under survivor retirement options;

(10) Clarifies that the computation of non-tax qualified benefits for highly compensated individuals includes the member's class of service as of June 30, 2004; and

(11) Amends and adds various definitions for consistency and conformity.

The Board of Trustees of the ERS testified in support of this bill.

Your Committee notes that various "housekeeping" amendments to the ERS are necessary to clarify and conform existing statutes to current practice, as well as to meet federal regulations that may have been recently amended which will impact the ERS.

Your Committee has also been informed that the county clerks for the counties of Hawaii and Kauai are currently allowed to claim membership in the ERS as class A members while the Directors of the Office of Council Services for the City and County of Honolulu and County of Maui are not accorded this same privilege. As these officials perform the same legislative support function as county clerks, they should be afforded this privilege. Accordingly, your Committee has amended this measure by:

(1) Inserting language classifying the director of the Office of Council Services for the City and County of Honolulu and County of Maui as class A members if the individual was in service prior to July 1, 2006; and

(2) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2310, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2310, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

 

		____________________________ KIRK CALDWELL, Chair