STAND. COM. REP. NO.222-02
RE: H.B. No. 2460
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Your Committee on Labor and Public Employment, to which was referred H.B. No. 2460 entitled:
"A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM,"
begs leave to report as follows:
The purpose of this bill is to reduce the annual contributions of the State and the counties to the Employees' Retirement System (ERS) by amortizing liability over a longer time period. Specifically, this bill extends the payment period to liquidate ERS's unfunded accrued liability from 15 to 29 years, beginning plan year 2001.
The Department of Budget and Finance (B&F) testified in support of this measure. ERS submitted comments.
Your Committee finds that this bill seeks to address the projected general fund shortfall from the tragic events of September 11, 2001. As of June 30, 2001, the unfunded actuarial accrued liability of the ERS was $991,000,000. Amortizing the unfunded liability over a longer time frame would reduce the State's annual payments by about $19,000,000 a year for fiscal year 2003-2004 through fiscal year 2006-2007.
However, your Committee is concerned about the long-term effects of this bill. B&F reported that they would be receiving a report from the ERS's actuary in approximately two weeks.
Upon further consideration, your Committee has amended this bill by removing the 29-year amortization period and instead inserting an unspecified period to facilitate further discussion. Other technical, nonsubstantive amendments were made for purposes of style and clarity.
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. 2460, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2460, 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 Employment,
SCOTT K. SAIKI, Chair