REPORT TITLE:
ERS


DESCRIPTION:
Allows deputy sheriffs to retire without penalty after 25 years
of service.  Allows contributory class ERS members to convert to
noncontributory class for reasons of hardship.  Makes members of
the PUC, LIRAB, and HLRB Class A members of the ERS.  (HB1416
SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1416
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 88, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "88-     Conversion of contributory class membership to
 
 5 noncontributory class membership for reasons of financial
 
 6 hardship.  (a)  Notwithstanding the statutorily defined classes
 
 7 of membership status, the board may authorize the conversion of a
 
 8 member's contributory class status to noncontributory class
 
 9 status upon a finding of a member's financial hardship.  The
 
10 board shall adopt and implement appropriate criteria and
 
11 procedures for a contributory class member to qualify for a
 
12 financial hardship membership conversion; provided that any
 
13 contributory class member who is not eligible for Social Security
 
14 benefits shall not be allowed to participate in any conversion
 
15 program authorized under this section.  The election by a member
 
16 to convert from contributory class status to noncontributory
 
17 class status shall be final and irrevocable.
 
18      (b)  Upon an affirmative determination by the board or the
 
19 board's designated representative that a contributory class
 

 
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 1 member is eligible for a financial hardship membership conversion
 
 2 and the acceptance by the member of the terms and conditions of a
 
 3 membership conversion agreement provided by the system, the
 
 4 system shall refund all contributions paid by the member for
 
 5 creditable service in the appropriate contributory class and any
 
 6 accrued interest thereon.
 
 7      (c)  Any member who elects to receive the financial hardship
 
 8 membership conversion provided under this section shall become a
 
 9 class C, noncontributory member of the system and all benefits,
 
10 limitations, and requirements of class C membership shall apply
 
11 to the member."
 
12      SECTION 2.  Section 88-21, Hawaii Revised Statutes, is
 
13 amended by adding a new definition to be appropriately inserted
 
14 and to read as follows:
 
15      ""Deputy sheriff":  any regularly employed member of the
 
16 department of public safety whose principal duty is to perform
 
17 the duties specified in section 26-14.6(f)."
 
18      SECTION 3.  Section 88-47, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 
20      "(a)  There shall be three classes of members in the system
 
21 to be known as class A, class B, and class C, defined as follows:
 
22      (1)  Class A shall consist of members covered by section
 
23           88-74(3), those members whose salaries are set forth in
 

 
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 1           sections 26-52 and 26-53, and their county
 
 2           counterparts, managing directors or administrative
 
 3           assistant to the mayor, and other department heads,
 
 4           including agency heads appointed by the mayor, first
 
 5           deputies appointed by the county attorney and
 
 6           prosecuting attorney, the county clerk and deputy
 
 7           county clerk of each county, the administrative
 
 8           director of the courts, the deputy administrative
 
 9           director of the courts, the [executive director]
 
10           chairperson and members of the labor and industrial
 
11           relations appeals board, the [executive director]
 
12           chairperson and members of the Hawaii labor relations
 
13           board, the chairperson and members of the public
 
14           utilities commission, investigators of the department
 
15           of the attorney general, narcotics enforcement
 
16           investigators, water safety officers not making the
 
17           election under section 88-271, public safety
 
18           investigations staff investigators, and those members
 
19           in service prior to July 1, 1984, including those who
 
20           are on approved leave of absence, who are covered by
 
21           Title II of the Social Security Act on account of
 
22           service creditable under this part.  This class shall
 
23           consist of:
 

 
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 1           (A)  All employees who enter membership after June 30,
 
 2                1957, except employees in positions to which
 
 3                coverage under Title II of the Social Security Act
 
 4                is not extended;
 
 5           (B)  All employees who were members on July 1, 1957,
 
 6                who elected to be covered by the Social Security
 
 7                Act; and
 
 8           (C)  All former class A retirants who return to
 
 9                employment after June 30, 1984, requiring the
 
10                retirant's active membership;
 
11      (2)  Class B shall consist of all members who are not class
 
12           A or class C members; and
 
13      (3)  Except for members described in [section 88-47(a)(1),]
 
14           paragraph (1), class C shall consist of all employees
 
15           in positions covered by Title II of the Social Security
 
16           Act who:
 
17           (A)  First enter service after June 30, 1984;
 
18           (B)  Reenter service after June 30, 1984, without
 
19                vested benefit status as provided in section
 
20                88-96(b);
 
21           (C)  Make the election to become a class C member as
 
22                provided in part VII; or
 
23           (D)  Are former class C retirants who return to service
 

 
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 1                requiring the retirant's active membership."
 
 2      SECTION 4.  Section 88-74, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "88-74  Allowance on service retirement.  Upon retirement
 
 5 from service, a member shall receive a retirement allowance as
 
 6 follows:
 
 7      (1)  If the member has attained age fifty-five, a retirement
 
 8           allowance of two per cent of the member's average final
 
 9           compensation multiplied by the total number of years of
 
10           the member's credited service as a class A and B
 
11           member, excluding any credited service as an elective
 
12           officer or legislative officer, plus a retirement
 
13           allowance of one and one-fourth per cent of the
 
14           member's average final compensation multiplied by the
 
15           total number of years of prior credited service as a
 
16           class C member; provided that:
 
17           (A)  After June 30, 1968, if the member has at least
 
18                ten years of credited service of which the last
 
19                five or more years prior to retirement is credited
 
20                service as a firefighter, police officer, or an
 
21                investigator of the department of the prosecuting
 
22                attorney;
 
23           (B)  After June 30, 1977, if the member has at least
 

 
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 1                ten years of credited service of which the last
 
 2                five or more years prior to retirement is credited
 
 3                service as a corrections officer;
 
 4           (C)  After June 16, 1981, if the member has at least
 
 5                ten years of credited service of which the last
 
 6                five or more years prior to retirement is credited
 
 7                service as an investigator of the department of
 
 8                the attorney general;
 
 9           (D)  After June 30, 1989, if the member has at least
 
10                ten years of credited service of which the last
 
11                five or more years prior to retirement is credited
 
12                service as a narcotics enforcement investigator;
 
13           (E)  After December 31, 1993, if the member has at
 
14                least ten years of credited service of which the
 
15                last five or more years prior to retirement is
 
16                credited service as a water safety officer; and
 
17           (F)  After June 30, 1994, if the member has at least
 
18                ten years of credited service, of which the last
 
19                five or more years prior to retirement are
 
20                credited service as a public safety
 
21                [investigative] investigations staff investigator;
 
22           then for each year of service as a firefighter, police
 
23           officer, corrections officer, investigator of the
 

 
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 1           department of the prosecuting attorney, investigator of
 
 2           the department of the attorney general, narcotics
 
 3           enforcement investigator, water safety officer, or
 
 4           public safety investigations staff investigator, the
 
 5           retirement allowance shall be two and one-half per cent
 
 6           of the member's average final compensation.  The
 
 7           maximum retirement allowance for those members shall
 
 8           not exceed eighty per cent of the member's average
 
 9           final compensation.  If the member has not attained age
 
10           fifty-five, the member's retirement allowance shall be
 
11           computed as though the member had attained age fifty-
 
12           five, reduced in accordance with factors of actuarial
 
13           equivalence adopted by the board upon the advice of the
 
14           actuary; provided that no reduction shall be made if
 
15           the member has at least twenty-five years of credited
 
16           service as a firefighter, police officer, corrections
 
17           officer, investigator of the department of the
 
18           prosecuting attorney, investigator of the department of
 
19           the attorney general, narcotics enforcement
 
20           investigator, public safety investigations staff
 
21           investigator, sewer worker, deputy sheriff of the
 
22           department of public safety, or water safety officer,
 
23           of which the last five or more years prior to
 

 
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 1           retirement is credited service in such capacities;
 
 2      (2)  If the member has made voluntary additional
 
 3           contributions for the purchase of an additional annuity
 
 4           and has not applied for a refund as permitted by
 
 5           section 88-72, the member may accept the refund at the
 
 6           time of retirement or, in lieu thereof, receive in
 
 7           addition to the retirement allowance provided in
 
 8           paragraph (1), an annuity that is the actuarial
 
 9           equivalent of the additional contributions with regular
 
10           interest;
 
11      (3)  If the member has credited service as a judge, the
 
12           member's retirement allowance shall be computed on the
 
13           following basis:
 
14           (A)  Irrespective of age, for each year of credited
 
15                service as a judge, three and one-half per cent of
 
16                the member's average final compensation in
 
17                addition to an annuity that is the actuarial
 
18                equivalent of the member's accumulated
 
19                contributions allocable to the period of such
 
20                service; and
 
21           (B)  For all other credited service, as provided in
 
22                paragraphs (1), (2), and (4).  No allowance shall
 
23                exceed seventy-five per cent of the member's
 

 
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 1                average final compensation.  If the allowance
 
 2                exceeds this limit, it shall be adjusted by
 
 3                reducing the annuity included in subparagraph (A),
 
 4                and the portion of the accumulated contributions
 
 5                specified in that subparagraph in excess of the
 
 6                requirements of the reduced annuity shall be
 
 7                returned to the member.
 
 8           The allowance for judges under this paragraph, together
 
 9           with the retirement allowance provided by the federal
 
10           government for similar service, shall in no case exceed
 
11           seventy-five per cent of the member's average final
 
12           compensation; or
 
13      (4)  If the member has credited service as an elective
 
14           officer or as a legislative officer, the member's
 
15           retirement allowance shall be derived by adding the
 
16           allowances computed separately under subparagraphs (A),
 
17           (B), (C), and (D) as follows:
 
18           (A)  Irrespective of age, for each year of credited
 
19                service as an elective officer, three and one-half
 
20                per cent of the member's average final
 
21                compensation as computed under section
 
22                88-81(d)(1), in addition to an annuity that is the
 
23                actuarial equivalent of the member's accumulated
 

 
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 1                contributions allocable to the period of service;
 
 2                and
 
 3           (B)  Irrespective of age, for each year of credited
 
 4                service as a legislative officer, three and one-
 
 5                half per cent of the member's average final
 
 6                compensation as computed under section
 
 7                88-81(d)(2), in addition to an annuity that is the
 
 8                actuarial equivalent of the member's accumulated
 
 9                contributions allocable to the period of service;
 
10           (C)  Irrespective of age, for each year of credited
 
11                service as a judge, three and one-half per cent of
 
12                the member's average final compensation as
 
13                computed under section 88-81(d)(3), in addition to
 
14                an annuity that is the actuarial equivalent of the
 
15                member's accumulated contributions allocable to
 
16                the period of service; and
 
17           (D)  For each year of credited service not included in
 
18                subparagraph (A), (B), or (C), the average final
 
19                compensation as computed under section 88-81(d)(4)
 
20                shall be multiplied by two per cent, two and one-
 
21                half per cent, or one and one-quarter per cent, as
 
22                applicable to the credited service earned as a
 
23                class A, B, or C member, respectively.
 

 
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 1           The total retirement allowance shall not exceed
 
 2           seventy-five per cent of the member's highest average
 
 3           final compensation calculated under section
 
 4           88-81(d)(1), (2), (3), or (4).  If the allowance
 
 5           exceeds this limit, it shall be adjusted by reducing
 
 6           any annuity accrued under subparagraphs (A), (B), and
 
 7           (C) and the portion of the accumulated contributions
 
 8           specified in these subparagraphs in excess of the
 
 9           requirements of the reduced annuity shall be returned
 
10           to the member.  If a member has service credit as an
 
11           elective officer or as a legislative officer in
 
12           addition to service credit as a judge, then the
 
13           retirement benefit calculation contained in this
 
14           paragraph shall supersede the formula contained in
 
15           paragraph (3)."
 
16      SECTION 5.  Section 88-281, Hawaii Revised Statutes, is
 
17 amended by amending subsection (b) to read as follows:
 
18      "(b)  If a member has at least twenty-five years of credited
 
19 service as a sewer worker [or as a], water safety officer, or
 
20 deputy sheriff, of which the last five or more years prior to
 
21 retirement is credited in such a capacity, then the sewer worker
 
22 [or], water safety officer, or deputy sheriff shall be eligible
 
23 to receive a normal retirement benefit unreduced for age."
 

 
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 1      SECTION 6.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 7.  This Act shall take effect upon its approval.