REPORT TITLE:
Employee Benefits/UH/DOE


DESCRIPTION:
Authorizes the University of Hawaii and the Department of
Education establish custodial accounts for the deposit of annuity
payments of employees of the University of Hawaii.  (CD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        951
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            C.D. 1
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO EMPLOYEE BENEFIT PLANS.


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

 1      SECTION 1.  Chapter 303, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "303-    Limitation on liability.  The University of Hawaii
 
 5 and the State of Hawaii shall not be held liable for the sums
 
 6 deferred or the results of any investment product."
 
 7      SECTION 2.  Chapter 303, Hawaii Revised Statutes, is amended
 
 8 as follows:
 
 9      1.  By amending the title to read:
 
10                           "CHAPTER 303
 
11        EMPLOYEES' ANNUITY AND CUSTODIAL ACCOUNT CONTRACTS"
 
12      2.  By amending section 303-1, Hawaii Revised Statutes, to
 
13 read:
 
14      "303-1 Purpose.  The purpose of this chapter is to provide
 
15 the means by which employees of the department of education and
 
16 the University of Hawaii may qualify for the favorable benefits
 
17 of section 403(b) of the Internal Revenue Code of [1954,] 1986,
 
18 as amended."
 
19      3.  By amending section 303-2, Hawaii Revised Statutes, to
 
20 read:
 

 
Page 2                                                     951
                                     S.B. NO.           S.D. 1
                                                        H.D. 1
                                                        C.D. 1

 
 1      "303-2 Contract for purchase of annuity[.] or investment
 
 2 in custodial account.  (a)  The department of education and the
 
 3 University of Hawaii, on behalf of any employee of the respective
 
 4 institutions, may enter into a written agreement with any [such]
 
 5 employee to purchase for the employee [an]:
 
 6      (1)  An annuity contract from an insurer who holds a
 
 7           certificate of authority under section 431:3-201 [or
 
 8           who offers an]; or
 
 9      (2)  An annuity contract qualified under section 401(k) of
 
10           the Internal Revenue Code[,] of 1986, as amended, which
 
11           provides a nationwide retirement trust for a group of
 
12           college or university football coaches who, due to the
 
13           nature of their jobs, change employers frequently.
 
14      (b)  The University of Hawaii may pay amounts to a custodial
 
15 account established on behalf of the employee pursuant to section
 
16 403(b)(7) of the Internal Revenue Code of 1986, as amended."
 
17      4.  By amending section 303-3, Hawaii Revised Statutes, to
 
18 read:
 
19      "303-3  [Premium withholding.] Withholding.  (a)  The
 
20 department of education and the University of Hawaii may also
 
21 enter into an agreement under which the employer shall withhold
 
22 from the salary of the employee the amount of the premiums
 
23 payable on account of the annuity contract, and shall make such
 

 
Page 3                                                     951
                                     S.B. NO.           S.D. 1
                                                        H.D. 1
                                                        C.D. 1

 
 1 premium payments on behalf of the employee.  The department of
 
 2 education and the University of Hawaii may contract with third
 
 3 parties to administer plans for the withholding of amounts from
 
 4 the salaries of their employees payable on account of annuity
 
 5 contracts and for making payments on their behalf.  Costs for
 
 6 implementing and administering these plans for the University of
 
 7 Hawaii shall be borne by the employees maintaining annuity
 
 8 contracts.
 
 9      (b)  The University of Hawaii may also enter into an
 
10 agreement under which the employer shall withhold from the salary
 
11 of the employee the amount payable on account of the custodial
 
12 account, and shall make the payments on behalf of the employee.
 
13 The University of Hawaii may contract with third parties to
 
14 administer plans for the withholding of amounts from the salaries
 
15 of their employees payable on account of custodial accounts and
 
16 for making payments on their behalf.  Costs for implementing and
 
17 administering these plans shall be borne by the employees
 
18 maintaining custodial accounts."
 
19      5.  By amending section 303-4, Hawaii Revised Statutes, to
 
20 read:
 
21      "303-4 Adoption of rules.  Each employer may adopt rules
 
22 to implement this chapter including[,] but not [by way of
 
23 limitation,] limited to:
 

 
Page 4                                                     951
                                     S.B. NO.           S.D. 1
                                                        H.D. 1
                                                        C.D. 1

 
 1      (1)  [the] The method of filing an election to accept an
 
 2           adjustment in earnings and revocation of the
 
 3           election[,];
 
 4      (2)  [the] The effective date of an election[,];
 
 5      (3)  [changes] Changes in the amount of the adjustment in
 
 6           earnings[,]; and 
 
 7      (4)  [selection] Selection of the insurance company or
 
 8           companies from which the annuity contracts are to be
 
 9           purchased[.] or to which payments into a qualified
 
10           custodial account are to be made."
 
11      SECTION 3.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 4.  This Act shall take effect on January 1, 2000.