Honolulu, Hawaii

, 2002

RE: S.B. No. 2715

S.D. 1



Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Labor, to which was referred S.B. No. 2715 entitled:


begs leave to report as follows:

The purpose of this measure is to amend the laws governing the administration of the Employees' Retirement System to significantly simplify and facilitate the expeditious administration and processing of pension benefits for public sector retirants.

The measure also establishes a $5,000 fine for any department that fails to provide the Employees' Retirement System with personnel information needed to finalize pension benefits within sixty days of the System's request.

Testimony in support of the measure was received from the Department of Budget and Finance. The University of Hawaii, the City and County of Honolulu's Department of Human Resources and Police Department, the County of Maui's Department of Personnel Services, and the County of Kauai's Department of Personnel Services all voiced concerns over the $5,000 fine. The City and County of Honolulu's Police Department was also concerned that making pension payments monthly instead of semi-monthly and restricting the days upon which a retirant is allowed to designate as the retirant's date of retirement...both contained as amendments in the measure...would place undue burdens on retirants. The Employees' Retirement System provided comments on the measure.

Your Committee finds that the measure:

1. Assesses a $5,000 penalty to departments or agencies for non-compliance with an ERS request for personnel information:

2. Requires the Department of Health to furnish death records of retirants and beneficiaries to the Employees' Retirement System;

3. Simplifies the computation of retirement service credits;

4. Simplifies average final compensation (AFC) computations;

5. Commences pension benefits on the first of each month;

6. Extends the ninety-day filing requirement for retirement to 150 days;

7. Changes pension benefit payments from semimonthly to monthly; and

8. Allows beneficiaries to keep a full monthís pension for the month of the pensionerís death;

Your Committee finds that these proposals will enable the Employees' Retirement System to finalize memberís retirement, disability, and death benefits on a more timely basis, and reduce the significant retirement research effort by the State and county payroll and personnel offices.

Your Committee has amended the measure by:

(1) Deleting the provisions that enable the Employees' Retirement System to impose a fine on noncomplying departments and agencies;

(2) Deleting the provisions that require the Department of Health to furnish death records of retirants and beneficiaries to the Employees' Retirement System;

(3) Recasting the provisions that require pension benefits to be paid on a monthly basis effective January 1, 2003, so that the monthly pension benefit payment only affects persons retiring after January 1, 2003; and

(4) Making numerous technical, nonsubstantive amendments for the purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2715, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2715, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor,