STAND. COM. REP. NO. 319

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1622
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1622 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to allow a contributory
member of the Employees Retirement System to make a one-time
withdrawal of contributions in case of financial hardship.

     Testimony in support of the measure was received from a
private citizen.  The Employees Retirement System submitted
comments on the measure.

     Your Committee finds that no other public pension fund in
the nation provides for the withdrawal of employee contributions
while the employee is still in active service.  However, your
Committee is also keenly aware of the tough economic times facing
many families across the State.  To this end, providing public
employees who are contributory members of the Employees
Retirement System with a means by which to leverage their pension
contributions in the near term is a compassionate and prudent
concept.

     Understanding the concerns of the Employees Retirement
System and in order to avoid setting a precedent for future
attempts to remove employee contributions from the Employees
Retirement System, your Committee has amended the measure by

 
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                                   STAND. COM. REP. NO. 319
                                   Page 2


deleting its substance and inserting therefor, provisions that
enable the Employees Retirement System's Board of Trustees to
establish a loan program for members facing financial hardship.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 1622, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 1622, S.D. 1, and be referred to the Committee on Ways and
Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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