Report Title:

ERS; Interest on Late-Processed Pensions

Description:

Requires the Employees' Retirement System to pay interest on pensions that are not processed and issued within ninety days of a member's retirement. Requires the interest to be paid by the department or departments responsible for the delay in processing the retirement allowance.

THE SENATE

S.B. NO.

781

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to the employees' retirement system.

 

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

SECTION 1. Chapter 26, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"26- Duty of the departments; payment of interest accrued on late-processed pensions. Each department shall pay to the employees' retirement system any interest accrued as a result of the department's delay in providing employee information to the employees' retirement system for the purpose of processing pension payment. Any interest accrued pursuant to this section shall be calculated in accordance with section 88-   ."

SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"88- Interest accrual and payment on late-processed pension. Upon the actual retirement date of a member, the system shall have ninety days to process the member's initial retirement allowance in the manner specified in the member's application for retirement. If payment of a retirement allowance by the system has not commenced on or before the ninetieth day, the system shall also pay to the retirant interest on the initial payment at the rate of per cent per year calculated from the ninety-first day to the date that actual payment is made. If a delay in the processing of a pension results in the payment of interest pursuant to this section and the board determines that the delay is attributed to a department or departments' untimely submission of member information, then the interest shall be paid by the department or departments responsible for the delay in processing the retirement allowance. For ordinary disability and service-connected disability retirements, the system shall have ninety days from the date that the member's retirement is approved by the board of trustees or actual retirement date specified by the member, whichever is later."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

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