SB1158 SD2

SECTION 1. Section 88-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) A retirant may be employed without reenrollment in the system and suffer no loss or interruption of benefits provided by the system or under chapter 87A if the retirant is employed:

(1) As an elective officer pursuant to section 88-42.6(c) or as a member of the legislature pursuant to section [~~88-73(d);~~] 88-73(e);

(2) As a juror or precinct official;

(3) As a part-time or temporary employee excluded from membership in the system pursuant to section 88-43, as a session employee excluded from membership in the system pursuant to section 88-54.2, as the president and chief executive officer of the Hawaii tourism authority excluded from membership in the system pursuant to section 201B-2, or as any other employee expressly excluded by law from membership in the system; provided that:

(A) The retirant was not employed by the State or a county during the six calendar months prior to the first day of reemployment; and

(B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement;

(4) In a position identified by the appropriate jurisdiction as a labor shortage or difficult-to-fill position; provided that:

(A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment;

(B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement; and

(C) Each employer shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability; or

(5) As a teacher or an administrator in a teacher shortage area identified by the department of education or in a charter school or as a mentor for new classroom teachers; provided that:

(A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment;

(B) No agreement was entered into between the State or a county and the retirant prior to the retirement of the retirant, for the return to work by the retirant after retirement; and

(C) The department of education or charter school shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability."

SECTION 2. Section 88-21.5, Hawaii Revised Statutes, is amended to read as follows:

"§88‑21.5 Compensation. (a) For a member who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, unless a different meaning is plainly required by context, as used in this part, "compensation" means:

(1) Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed;

(2) Overtime, differentials, and supplementary payments;

(3) Bonuses and lump sum salary supplements; and

(4) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended.

Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one‑twelfth of compensation for the twelve months prior to the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned:

(1) During the period agreed‑upon by the employer and employee, but in any event over a period of not less than twelve months; or

(2) In the absence of an agreement between the employer and the employee, over the twelve months prior to the date on which the bonus or lump sum salary supplement is payable.

(b) For a member who becomes a member after June 30, 2012, except for a police officer who becomes a member after June 30, 2023, unless a different meaning is plainly required by context, "compensation" as used in this part:

(1) Means:

(A) The normal periodic payments of money for service, the right to which accrues on an hourly, daily, monthly, or annual basis;

(B) Shortage differentials;

(C) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; and

(D) Twelve-month differentials for employees of the department of education; and

(2) Shall not include any other additional or extra payments to an employee or officer, including overtime, supplementary payments, bonuses, lump sum salary supplements, allowances, or differentials, including differentials for stand-by duty, temporary unusual work hazards, compression differentials, or temporary differentials, except for those expressly authorized pursuant to subsection (b)(1)(B), (b)(1)(C), and (b)(1)(D)."

SECTION 3. Section 88-42.6, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:

"(c) Notwithstanding section 88-21, 88-98, 88-273(c), or 88-344, or any other law to the contrary, the retirement allowance of a retirant who returns to service as an elective officer shall not be suspended if the retirant:

(1) Retired pursuant to section [~~88-73(d);~~] 88-73(e); or

(2) Has been retired for at least twelve consecutive months prior to return to service and elects to have the retirement allowance continue. The election whether or not to have the retirant's retirement allowance continue shall be irrevocable and shall be made no later than thirty days following the retirant's first return to service as an elective officer.

If the retirant's retirement allowance is not suspended, the retirant shall not become a member of the system and shall not earn additional service credit or gain any additional retirement benefits.

(d) An elective officer who retired pursuant to section [~~88-73(d)~~] 88-73(e) shall not be eligible for membership in the system while serving as an elective officer."

SECTION 4. Section 88-45, Hawaii Revised Statutes, is amended to read as follows:

"§88-45 Employee contributions. After June 30, 1988, each class A and class B member shall contribute seven and eight‑tenths per cent of the member's compensation to the annuity savings fund; provided that after June 30, 1989, all firefighters, police officers, corrections officers, investigators of the departments of the prosecuting attorney and of the attorney general, narcotics enforcement investigators, water safety officers not making the election under section 88‑271, and public safety investigations staff investigators shall contribute twelve and two-tenths per cent of their compensation to the annuity savings fund for service in that capacity; provided further that each class A and class B member who becomes a member after June 30, 2012, shall contribute nine and eight-tenths per cent of the member's compensation to the annuity savings fund; provided further that all firefighters, police officers, corrections officers, investigators of the departments of the prosecuting attorney and of the attorney general, narcotics enforcement investigators, and public safety investigations staff investigators who become members after June 30, 2012, shall contribute fourteen and two‑tenths per cent of their compensation to the annuity savings fund for service in that capacity[.]; provided further that police officers who become members after June 30, 2023, shall contribute twelve and two-tenths percent of their compensation to the annuity savings fund for service in that capacity."

SECTION 5. Section 88-62, Hawaii Revised Statutes, is amended to read as follows:

"§88-62 Return to service of a former member. (a) For members who became members before July 1, 2012[:], or for a police officer who becomes a member after June 30, 2023:

(1) If a former member who has fewer than five years of credited service and who has been out of service for a period of four full calendar years or more after the year in which the former member left service, or if a former member who withdrew the former member's accumulated contributions returns to service, the former member shall become a member in the same manner and under the same conditions as anyone first entering service; however, the former member may obtain membership service credit in the manner provided by applicable law for credited service that was forfeited by the member upon termination of the member's previous membership. If the member did not withdraw the former member's accumulated contributions prior to the former member's return to service, the accumulated contributions shall be returned to the member as part of the process of enrolling the member in the system if the member's accumulated contributions are $1,000 or less at the time of distribution. If the accumulated contributions for the service the member had when the member previously terminated employment are greater than $1,000 and the member does not make written application, prior to or contemporaneously with the member's return to service, for return of the accumulated contributions, the member may not withdraw the member's accumulated contributions, except as provided by section 88-96 or 88-341, until the member retires or attains age sixty-two. The member shall not be entitled to service credit by reason of the system's retention of the member's accumulated contributions for the service the member had when the member previously terminated employment.

To be eligible for any benefit, the member shall fulfill the membership service requirements for the benefit through membership service after again becoming a member, in addition to meeting any other eligibility requirement established for the benefit; provided that the membership service requirement shall be exclusive of any former service acquired in accordance with section 88-59 or any other section in part II, VII, or VIII;

(2) If a former member with fewer than five years of credited service and who did not withdraw the former member's accumulated contributions returns to service within four full calendar years after the year in which the former member left service, the former member shall again become a member in the same manner and under the same conditions as anyone first entering service, except that the member shall be credited with service credit for the service the member had when the member terminated employment and:

(A) If the member returns to service as a class A or class B member, the member's new and previous accumulated contributions shall be combined; or

(B) If the member returns to service after June 30, 2006, as a class H member, section 88-321(b) shall apply; and

(3) If a former member with five or more years of credited service who did not withdraw the former member's contributions returns to service, the former member's status shall be in accordance with the provisions described in section 88-97.

(b) For members who become members after June 30, 2012[:], except police officers who become members after June 30, 2023:

(1) If a former member who has fewer than ten years of credited service and who has been out of service for a period of four full calendar years or more after the year in which the former member left service, or if a former member who withdrew the former member's accumulated contributions returns to service, the former member shall become a member in the same manner and under the same conditions as anyone first entering service; however, the former member may obtain membership service credit in the manner provided by applicable law for credited service that was forfeited by the member upon termination of the member's previous membership. If the member did not withdraw the former member's accumulated contributions prior to the former member's return to service, the accumulated contributions shall be returned to the member as part of the process of enrolling the member in the system if the member's accumulated contributions are $1,000 or less at the time of distribution. If the accumulated contributions for the service the member had when the member previously terminated employment are greater than $1,000 and the member does not make written application, prior to or contemporaneously with the member's return to service, for return of the accumulated contributions, the member may not withdraw the member's accumulated contributions, except as provided by section 88-96 or 88-341, until the member retires or attains age sixty-two. The member shall not be entitled to service credit by reason of the system's retention of the member's accumulated contributions for the service the member had when the member previously terminated employment. To be eligible for any benefit, the member shall fulfill the membership service requirements for the benefit through membership service after again becoming a member, in addition to meeting any other eligibility requirement established for the benefit; provided that the membership service requirement shall be exclusive of any former service acquired in accordance with section 88-59 or any other section in part II, VII, or VIII;

(2) If a former member with fewer than ten years of credited service and who did not withdraw the former member's accumulated contributions returns to service within four full calendar years after the year in which the former member left service, the former member shall again become a member in the same manner and under the same conditions as anyone first entering service, except that the member shall be credited with service credit for the service the member had when the member terminated employment:

(A) If the member returns to service as a class A or class B member, the member's new and previous accumulated contributions shall be combined; or

(B) If the member returns to service as a class H member, section 88-321(b) shall apply; and

(3) If a former member with ten or more years of credited service who did not withdraw the former member's contributions returns to service, the former member's status shall be in accordance with the provisions described in section 88-97."

SECTION 6. Section 88-73, Hawaii Revised Statutes, is amended to read as follows:

"§88-73 Service retirement. (a) Any member who:

(1) Became a member before July 1, 2012, and has at least five years of credited service and has attained age fifty-five;

(2) Became a member before July 1, 2012, and has at least twenty-five years of credited service;

(3) Has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer;

(4) Becomes a member after June 30, 2012, and has at least ten years of credited service and has attained age sixty; or

(5) Becomes a member after June 30, 2012, and has at least twenty-five years of credited service and has attained age fifty-five,

shall become eligible to receive a retirement allowance after the member has terminated service[.]; provided that county police officers shall become eligible to receive a retirement allowance pursuant to section 88-74(i).

(b) Notwithstanding subsection (a), any police officer who becomes a member after June 30, 2023, and who:

(1) Has at least five years of credited service as a police officer and has attained age fifty-five;

(2) Has at least twenty-five years of credited service as a police officer; or

(3) Has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer,

shall become eligible to receive a retirement allowance after the member has terminated service.

[~~(b)~~] (c) Any member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, and who has at least five years of credited service and has attained age fifty-five or has at least twenty-five years of credited service shall become eligible to receive a retirement allowance after the member has terminated service. Any member who first earned credited service as a judge after June 30, 2012, and has at least ten years of credited service and has attained age sixty or has at least twenty-five years of credited service and has attained age fifty-five shall be eligible to receive a retirement allowance after the member has terminated service.

[~~(c)~~] (d) A member may retire upon the written application specifying the date of retirement, which shall not be less than thirty days nor more than one hundred fifty days subsequent to the date of filing. Retirement shall be effective on the first day of a month, except for the month of December when retirement on the first or last day of the month shall be allowed.

[~~(d)~~] (e) Any member of the legislature who attains age sixty-five may retire and receive a service retirement allowance although the member continues to fill the elective position.

[~~(e)~~] (f) In the case of a class A or B member who also has prior credited service under part VII or part VIII, total credited service as a class A, class B, class C, and class H member shall be used to determine the eligibility for retirement allowance.

[~~(f)~~] (g) A member's right to the member's accrued retirement benefit is nonforfeitable upon the attainment of normal retirement age and the completion of the requisite years of credited service.

For the purpose of this subsection:

"Normal retirement age" means age sixty-five.

"Requisite years of credited service" means five years for class A and B members who became members before July 1, 2012, and police officers who become members after June 30, 2023, and ten years for class A and B members who became members after June 30, 2012."

SECTION 7. Section 88-74, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (b) to read:

"(b) If a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has attained age fifty-five, the member's maximum retirement allowance shall be two per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and class B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of two per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that:

(1) After June 30, 1968, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney;

(2) After June 30, 1977, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer;

(3) After June 16, 1981, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general;

(4) After June 30, 1989, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator;

(5) After December 31, 1993, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a water safety officer;

(6) After June 30, 1994, if the member has at least ten years of credited service, of which the last five or more years prior to retirement are credited service as a public safety investigations staff investigator;

(7) After June 30, 2002, if the member:

(A) Has at least ten years of credited service as a firefighter;

(B) Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and

(8) After June 30, 2004, if the member:

(A) Has at least ten years of credited service as a police officer;

(B) Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and

then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, water safety officer, or public safety investigations staff investigator, the retirement allowance shall be two and one-half per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced for age as provided in subsection (e)."

2. By amending subsections (e) and (f) to read:

"(e) Except as provided in subsections (b), (c), and (d), if a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has not attained age fifty-five at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below age fifty‑five, as follows:

(1) 0.4166 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus

(2) 0.3333 per cent for each month below age fifty and above age forty-four and eleven months; plus

(3) 0.2500 per cent for each month below age forty-five and above age thirty-nine and eleven months; plus

(4) 0.1666 per cent for each month below age forty;

provided that no reduction shall be made if the member has at least twenty-five years of credited service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, or water safety officer, of which the last five or more years prior to retirement is credited service in these capacities.

(f) If a member, who becomes a member after June 30, 2012, except a police officer who becomes a member after June 30, 2023, has attained age sixty, the member's maximum retirement allowance shall be one and three-fourths per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and class B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of one and three-fourths per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that:

(1) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney;

(2) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer;

(3) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general;

(4) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator;

(5) If the member has at least ten years of credited service, of which the last five or more years prior to retirement is credited service as a public safety investigations staff investigator;

(6) If the member:

(A) Has at least ten years of credited service as a firefighter;

(B) Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and

(7) If the member:

(A) Has at least ten years of credited service as a police officer;

(B) Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and

then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, or public safety investigations staff investigator, the retirement allowance shall be two and one-fourth per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age sixty, the member's retirement allowance shall be computed as though the member had attained age sixty, reduced for age as provided in subsection (i)."

3. By amending subsection (i) to read:

"(i) Except as provided in subsections (f), (g), and (h), if a member, who becomes a member after June 30, 2012, except a police officer who becomes a member after June 30, 2023, has not attained age sixty at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below age sixty, as follows:

(1) 0.4166 per cent for each month below age sixty and above age fifty-four and eleven months; plus

(2) 0.3333 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus

(3) 0.2500 per cent for each month below age fifty and above age forty-four and eleven months; plus

(4) 0.1666 per cent for each month below age forty-five;

provided that no reduction shall be made if the member has attained the age of fifty-five and has at least twenty-five years of credited service as a firefighter, [~~police officer,~~] corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, water safety officer, or emergency medical technician, of which the last five or more years prior to retirement is credited service in these capacities[.]; provided further that no reduction shall be made if the member has at least twenty-five years of credited service as a county police officer regardless of whether the member has not attained the age of fifty-five."

SECTION 8. Section 88-74.6, Hawaii Revised Statutes, is amended to read as follows:

"§88-74.6 Unreduced allowance on service retirement; when applicable. In addition to those positions identified in section 88-74(e) and notwithstanding any law in this part that requires a member to attain age fifty-five to qualify for an unreduced service retirement allowance, if a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has at least:

(1) Thirty years of credited service through June 30, 2003;

(2) Twenty-nine years of credited service on or after July 1, 2004;

(3) Twenty-eight years of credited service on or after July 1, 2005;

(4) Twenty-seven years of credited service on or after July 1, 2006;

(5) Twenty-six years of credited service on or after July 1, 2007; or

(6) Twenty-five years of credited service on or after July 1, 2008,

as an emergency medical technician, of which the last five or more years prior to retirement is credited service in that capacity, then upon retirement and irrespective of age, that member's service retirement allowance shall not be reduced for actuarial purposes."

SECTION 9. Section 88-74.8, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) This section shall not apply to accrued retirement benefits that are non-forfeitable pursuant to sections [~~88‑73(f),~~] 88-73(g), 88-281(g), and 88-331(f)."

SECTION 10. Section 88-81, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The average final compensation of members shall be calculated as follows:

(1) For employees who become members before January 1, 1971:

(A) During the member's five highest paid years of credited service, including vacation pay, or the three highest paid years of credited service excluding vacation pay, whichever is greater; or

(B) If the member has fewer than three years of credited service, during the member's actual years of credited service;

(2) For employees who become members after December 31, 1970, but before July 1, 2012:

(A) During the member's three highest paid years of credited service, excluding vacation pay; or

(B) If the member has fewer than three years of credited service, during the member's actual years of credited service; [~~and~~]

(3) For employees, except police officers as set forth in paragraph (4), who become members after June 30, 2012:

(A) During the member's five highest paid years of credited service, excluding vacation pay; or

(B) If the member has fewer than five years of credited service, during the member's actual years of credited service[.]; and

(4) For police officers who become members after June 30, 2023;

(A) During the member's three highest paid years of credited service, excluding vacation pay; or

(B) If the member has fewer than three years of credited service, during the member's actual years of credited service."

SECTION 11. Section 88-90, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Notwithstanding subsections (a) and (b), for employees who become members after June 30, 2012, and for any person who receives a monthly pension, annuity or retirement allowance as a beneficiary or survivor of the employee, the post retirement allowance shall consist of an amount equivalent to one and one-half per cent of the monthly pension, annuity, or retirement allowance as originally computed and paid. Payment of the benefit shall commence on the first day of July following the calendar year in which the payment of the pension, annuity or retirement allowance is effective. This subsection shall not apply to police officers who become members after June 30, 2023."

SECTION 12. Section 88-96, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Any member who ceases to be an employee and who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, and has fewer than five years of credited service, excluding unused sick leave, or who becomes a member after June 30, 2012, and has fewer than ten years of credited service, excluding sick leave, shall, upon application to the board, be paid all of the member's accumulated contributions and the member's membership shall thereupon terminate and all credited service shall be forfeited; provided that a member shall not be paid the member's accumulated contributions:

(1) If the member becomes an employee again within fifteen calendar days from the date the member ceased to be an employee; or

(2) If, at the time the application for return of accumulated contributions is received by the board, the member has become an employee again.

Regular interest shall be credited to the former employee's account until the former employee's accumulated contributions are returned to the former employee; provided that the former employee's membership shall not continue after the fourth full year following the calendar year in which the individual's employment terminates. Upon termination of the former employee's membership, the former employee's credited service shall be forfeited and, if the former employee's accumulated contributions are $1,000 or less at the time of distribution, the system shall return the former employee's contributions to the former employee. If the former employee does not become an employee again and if the former employee's accumulated contributions have not been withdrawn by the former employee or previously returned by the system to the former employee, the system shall return the former employee's accumulated contributions to the former employee as soon as possible after the later of: (A) the former employee attaining age sixty-two; or (B) the termination of the former employee's membership.

(b) Any member who ceases to be an employee and who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, and has more than five years of credited service, excluding unused sick leave, or who becomes a member after June 30, 2012, and has more than ten years of credited service, excluding sick leave, shall, upon application to the board, be paid all of the member's accumulated contributions and thereupon the former employee's membership shall terminate and all credited service shall be forfeited; provided that a member shall not be paid the member's accumulated contributions:

(1) If the member becomes an employee again within fifteen calendar days from the date the member ceased to be an employee; or

(2) If, at the time the application for return of accumulated contributions is received by the board, the member has become an employee again.

If the contributions are not withdrawn by the former employee within four calendar years following the calendar year in which the former employee's employment terminates, the former employee shall have established vested benefit status and shall be eligible for the service retirement benefit in effect at the time of the former employee's retirement, payable in accordance with this chapter; provided that if the former employee withdraws the former employee's accumulated contributions, the former employee's vested benefit status shall terminate and all credited service shall be forfeited."

SECTION 13. Section 88-311, Hawaii Revised Statutes, is amended by amending the definition of "hypothetical account balance" to read as follows:

""Hypothetical account balance" means:

(1) For members who became members before July 1, 2012, or police officers who became members after June 30, 2023, the sum of:

(A) One and one-half times the sum of:

(i) Employee contributions made, either by the member or on behalf of the member, pursuant to section 88-325;

(ii) Accumulated interest at the regular interest rate on the employee contributions; and

(B) Any employee contributions, including rollovers and contributions used to convert credited service to class H credited service, or used to purchase service, and accumulated interest on the employee contributions at the regular interest rate; or

(2) For members who become members after June 30, 2012, the sum of:

(A) One and one-fifth times the sum of:

(i) Employee contributions made, either by the member or on behalf of the member, pursuant to section 88-325; and

(ii) Accumulated interest at the regular interest rate on the employee contributions; and

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect on July 1, 2050; provided that the amendments made to sections 88-45 and 88-74, Hawaii Revised Statutes, by sections 4 and 7 of this Act, respectively, shall not be repealed when those sections are amended on January 1, 2024, by section 17(d) of Act 278, Session Laws of Hawaii 2022.

THE SENATE	S.B. NO.	1158
THIRTY-SECOND LEGISLATURE, 2023		S.D. 2
STATE OF HAWAII