Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1047
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 1047 entitled: 


begs leave to report as follows:

     The purpose of this measure is to limit the maximum
retirement allowances of members of the Employees' Retirement
System as follows:

     (1)  80 percent of the average final compensation (AFC) for
          contributory members;

     (2)  70 percent of the AFC for ordinary disability for
          contribution members; and

     (3)  50 percent of the AFC for service, ordinary disability,
          and service-connected disability for all
          noncontributory members.

     The Department of Budget and Finance testified in support of
this measure with suggested technical amendments.  The Employees'
Retirement System commented on this measure.  The United Public
Workers opposed this measure.

     Your Committee finds that section 88-74, Hawaii Revised
Statutes, currently limits the retirement allowance for fire
fighters, police officers, corrections officers, certain

                                 STAND. COM. REP. NO. 632
                                 Page 2

investigator positions and water safety officers to 80 percent of
their AFC.  Your Committee further finds that judges, elective
officers, and legislative officers are also statutorily limited
to 75 percent of their AFC.  However, there are no limits on the
maximum retirement allowance for most of the other state or
county employees.

     Your Committee finds that as a result, there have been cases
where retired employees have received pensions that exceed 100
percent of their average final compensation.  This measure
establishes comparable limits for contributory and non-
contributory members for service, ordinary disability, and
service-connected retirements, as applicable.  Your Committee
further finds that this measure calculates benefits more
equitably while reducing Hawaii's taxpayer burdens.

     Your Committee made technical, nonsubstantive amendments for
purposes of style, clarity, and consistency.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 1047, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 1047, H.D.
1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public

                                   TERRY NUI YOSHINAGA, Chair