THE SENATE

S.B. NO.

1324

TWENTY-EIGHTH LEGISLATURE, 2015

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO DIVORCE.

 

 

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

 


     SECTION 1. The purpose of this Act is to create statutory authority for the employees' retirement system to make direct payment to the former spouse of a retirant who has been awarded a portion of the retirant's retirement benefits as part of a property division adjudicated, ordered, or decreed by a family court in a divorce proceeding.

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

     "§88-    Distribution of property in a divorce action.  (a)  If a final judgment, order, or decree in a divorce action awards the spouse or former spouse of a member or retirant a portion of the pension, annuity, retirement allowance, or refunded contributions of the member or retirant, that portion shall be paid directly to the spouse or former spouse of the member or retirant; provided that the judgment, order, or decree:

     (1)  Identifies the member or retirant and spouse or former spouse by name, address, and last four digits of social security number;

     (2)  Directs the system to make payment of the share of the spouse or former spouse directly to the spouse or former spouse;

     (3)  States the amount or percentage of the member or retirant's benefits to be paid by the system to the spouse or former spouse, or the manner in which the amount or percentage is to be determined;

     (4)  Specifies that each party shall be liable for any taxes on the share of the pension, annuity, retirement benefit, or refunded contributions directly received by the party from the system; and

     (5)  Does not require the system to:

         (A)  Provide any type or form of benefit, or any option, not otherwise provided by the system;

         (B)  Provide increased benefits, determined on the basis of actuarial value; or

         (C)  Require the system to provide benefits or refunds to the spouse or former spouse that are required to be paid to another spouse or former spouse pursuant to another judgment, decree, or order subject to this section.

     (b)  Payments to a spouse or former spouse of a portion of a retirant's pension, annuity, or retirement allowance under this section shall commence on the later of:

     (1)  The month following the month in which the system receives a judgment, decree, or order complying with the requirements of subsection (a) and payment to the system of any fees and charges for review and processing of the judgment, decree, or order; or

     (2)  Commencement of the member or retirant's retirement benefits.

     (c)  Payments to a spouse or former spouse of a portion of a retirant's pension, annuity or retirement allowance under this section shall terminate upon the death of the former spouse or the death of the retirant, whichever occurs earlier.

     (d)  The system shall not be bound by any judgment, decree, or order made pursuant to a domestic relations law of this State or another state that:

     (1)  Requires any action on the part of the system contrary to governing law other than the direct payment of the benefit awarded to the spouse or former spouse of a member or retirant;

     (2)  Makes the award to the spouse or former spouse an interest that is contingent on any condition other than those conditions resulting in liability of the system for payment under governing law;

     (3)  Purports to give someone other than a member or retirant the right to designate a beneficiary or to choose any retirement plan or option available from the system;

     (4)  Attaches a lien to any part of amounts payable with respect to a member or retirant; provided that nothing in this subsection shall be construed as limiting the ability of the child support enforcement agency from collecting child support arrearages from benefits;

     (5)  Awards a spouse or former spouse of a member or retirant a portion of the benefits payable with respect to a member or retirant under the system and purports to require the system to make a lump sum payment of the awarded portion of the benefits to the spouse or former spouse that are not payable in a lump sum; or

     (6)  Purports to require the system, without action by the member, to terminate a member from membership or employment, to refund contributions, or to retire a member.

     (e)  For the purpose of calculating earnings limitations for retirants who have been restored to service, the retirant's maximum retirement allowance shall be considered to be the amount that would have been paid if there had been no judgment, order, or decree for the payment of any portion of the retirant's pension, annuity, or retirement allowance to the retirant's spouse or former spouse.

     (f)  If a member terminates membership in the system by withdrawal of contributions, the system shall pay all or a portion of the amount withdrawn to a former spouse as directed by a judgment, order, or decree meeting the requirements of subsection (a).  If the former member later resumes membership in the system, the system shall pay to the spouse or former spouse no portion of any benefits payable to the member or retirant that results from the resumption of membership, even if those benefits result in part from reinstatement of service credit initially credited during the marriage.

     (g)  Subsection (f) notwithstanding, in order to receive credit for all service represented by withdrawn or refunded contributions, a member who in reinstating service credit by repaying amounts previously withdrawn or refunded shall repay the entire amount withdrawn or refunded, regardless of whether a portion or all of the amount was paid to a spouse or former spouse.

     (h)  When the system has not yet begun to make payment to a spouse or former spouse under this section and is provided with proof of the death of the spouse or former spouse, benefits payable with respect to the member or retirant shall be paid without regard to the judgment, order, or decree providing for payment to the spouse or former spouse.

     (i)  If a member or retirant or the beneficiary or estate of either receives the amount of any distribution that should have been paid by the system to the spouse or former spouse of the member or retirant, the recipient shall be designated a constructive trustee for the amount received and shall immediately transmit that amount to the person to whom the amount should have been paid.  If a spouse or former spouse of a member or retirant, or the estate, heirs, or legatees of the spouse or former spouse receives any amount of a distribution that should have been paid to a member or retirant, or the estate, heirs, or legatees of either, the recipient shall be designated a constructive trustee for the amount received and shall immediately transmit that amount to the member or retirant or other person to whom the amount should have been paid to the recipient.  If a member, retirant, or the beneficiary, estate, heirs, or legatees of either, receive any amount that should not have been paid by the system, the recipient shall be designated a constructive trustee for the amount received and shall immediately transmit that amount to the system.

     (j)  The board shall adopt rules in accordance with chapter 91 and produce such forms as it deems necessary to effectuate this section.  The board may, by motion at a duly noticed meeting of the board, establish and revise from time to time:

     (1)  A filing fee for the processing and review of judgments, orders, and decrees issued for the purposes of this section; and

     (2)  A schedule of charges for legal and actuarial services incurred by the system in the review and processing of judgments, orders, and decrees issued for the purposes of this section."

     SECTION 3.  Section 88-91, Hawaii Revised Statutes, is amended to read as follows:

     "§88-91  Exemption from taxation and execution.  The right of a person to a pension, an annuity or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or death benefit, any other right accrued or accruing to any person under this part and the moneys in the various funds created under this part are exempted from any tax of the State and, except as provided in [section] sections 88-92 [provided,] and 88-  , shall not be subject to execution, garnishment or any other process and shall be unassignable except as in this part specifically provided."

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2015–2016 and the same sum or so much thereof as may be necessary for fiscal year 2016–2017 for the planning and expenditures necessary for the implementation of this Act.

     The sums appropriated shall be expended by the employees' retirement system of the State of Hawaii for the purposes of this Act.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on January 7, 2059.

 


 


 

Report Title:

Employees' Retirement System Benefits; Direct Payment to Former Spouse; Divorce; Appropriation

 

Description:

Provides statutory authority for the employees' retirement system administrator to make direct payment to a former spouse of a member of benefits or portion thereof pursuant to valid court judgment, order, or decree.  Appropriates money to implement the purposes of this Act.  Takes effect on 1/7/2059.  (SD1)

 

 

 

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