STAND. COM. REP. NO.525

Honolulu, Hawaii

, 2003

RE: S.B. No. 797

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 797 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 require retirees and beneficiaries of bargaining units 5 (teachers) and 12 (police officers) to be paid on a semimonthly basis.

This measure also allows nine, ten, and eleven-month employees, elective officers, and appointees of the governor to specify the effective date of their retirement.

Testimony in support of the measure was received from the Hawaii Fire Fighters Association, the Hawaii State Teachers Association, the Retirees Unit of the Hawaii Government Employees Association, and an individual.

Testimony in opposition to the measure was received from the Employees' Retirement System.

Your Committee finds that Act 128, Hawaii Session Laws of 2002, changed the public employee pension payment law to require all individuals who become retirees or beneficiaries as of January 1, 2003, to be paid on a monthly rather than semimonthly basis. Your Committee believes that, in effect, this change in payment schedule delays payment to retirees because they must wait until the end of the month to receive their only pension payment for that month. As a result, this delay can create a financial burden for retirees, particularly those living on fixed incomes.

Act 128, Hawaii Session Laws of 2002, also amended the law governing when a retiree's retirement becomes effective to require all members to retire on the first day of the month, or on the last day of the year, in order to facilitate the expeditious processing of pension benefits.

Your Committee finds that nine, ten, and eleven-month employees, elective officers, and appointees of the governor, due to their unique situations, should be allowed to specify their own date of retirement to coincide with their work obligations in order to preserve their benefits. This measure accommodates these unique employees by exempting them from the timeframe requirements, thus enabling them to select their own retirement date.

Your Committee also finds that in recognition for dedicated years of service to the State, retirees and beneficiaries deserve timely payment of benefits so as to avoid the creation of financial hardship. Therefore, as the Employees' Retirement System is already equipped to handle the payment of benefits on both a monthly and semimonthly basis, the option should be provided to retirees and beneficiaries to determine which method best serves their needs.

Your Committee has amended the measure by:

(1) Deleting language from the measure requiring, effective January 1, 2003, all retirees and beneficiaries who retire or become beneficiaries after January 1, 2003, to be paid on a monthly basis;

(2) Deleting language from the measure requiring unit 5 retirees and beneficiaries to be paid semimonthly; and

(3) Adding language to the measure to allow all retirees or beneficiaries who become retirees or beneficiaries after January 1, 2003, the option to be paid either monthly or semimonthly.

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. 797, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 797, 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,

____________________________

BRIAN KANNO, Chair