STAND. COM. REP. NO. 2115
RE: S.B. No. 2767
Honorable Ronald D. Kouchi
President of the Senate
Twenty-Ninth State Legislature
Regular Session of 2018
State of Hawaii
Your Committee on Labor, to which was referred S.B. No. 2767 entitled:
"A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM,"
begs leave to report as follows:
The purpose and intent of this measure is to clarify the acquisition of service provisions to maintain the status of the Employees' Retirement System (ERS) as a tax-qualified plan under section 401(a) of the Internal Revenue Code.
Your Committee received testimony in support of this measure from the Board of Trustees of the Employees’ Retirement System.
Your Committee finds that the ERS must use specific methods of purchasing additional membership service credit by pre-tax contributions to maintain the tax-qualified status of the system. Act 86, Session Laws of Hawaii 2015, prospectively changes the cost to purchase membership service based on actuarially neutral cost calculation, with a delayed implementation date of July 1, 2020. This measure makes necessary amendments to existing law affecting purchases after June 30, 2020, to ensure that the tax-qualified status of the ERS is not jeopardized.
Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.
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. 2767, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2767, S.D. 1, and be referred to your Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Labor,
JILL N. TOKUDA, Chair