STAND. COM. REP. NO. 334

 

Honolulu, Hawaii

 

RE: S.B. No. 1374

S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

 

Sir:

 

Your Committee on Labor, Culture and the Arts, to which was referred S.B. No. 1374 entitled:

 

"A BILL FOR AN ACT RELATING TO THE HAWAII RETIREMENT SAVINGS PROGRAM,"

 

begs leave to report as follows:

 

The purpose and intent of this measure is to:

 

(1) Establish a Hawaii retirement savings program for private sector employees;

 

(2) Establish the Hawaii retirement savings program administrative fund;

 

(3) Require the Department of Budget and Finance to prepare an annual report detailing the Department's activities for the previous fiscal year to the Governor and Legislature; and

 

(4) Appropriate funds.

 

Your Committee received testimony in support of this measure from Policy Advisory Board for Elder Affairs, Chinatown Gateway Plaza Tenant Association, Art Nelson Sailmaker/Ullman Sails Hawaii, Gochi Grill, Hawaii Retirement Savings Program, AARP Hawaii, Oahu County Committee on Legislative Priorities of the Democratic Party of Hawaii, and seven individuals. Your Committee received testimony in opposition to this measure from NAIFA Hawaii, Hawaii Bankers Association, and American Council of Life Insurers. Your Committee received comments on this measure from the Department of Budget and Finance.

 

Your Committee finds that there is an imminent retirement security crisis in the State, as many individuals do not have access to an employer-sponsored retirement plan. Your Committee further finds that individuals need a lifelong savings system that provides them with the opportunity to build their assets and attain future financial stability. Employees who are offered the opportunity to save through the employee's place of employment are significantly more likely to participate and make steady contributions to build retirement savings. Your Committee also finds that providing private sector employees with access to employer-sponsored retirement plans is a reliable way to promote savings needed for a secure retirement, improve economic mobility, and reduce wealth disparity. This measure establishes a Hawaii retirement savings program, which will ensure that in the future private sector employees will have the opportunity to contribute to a retirement plan, take charge of their financial futures, and live independently as they age. Your Committee notes that while the program will eventually require larger start-up and implementation costs, the appropriation in this measure will be used to hire staff to set up the program.

 

Your Committee has amended this measure by:

 

(1) Prohibiting employer cancellation of existing retirement plans for five years after the effective date; and

 

(2) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

 

As affirmed by the record of votes of the members of your Committee on Labor, Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1374, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1374, 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, Culture and the Arts,

 

 

 

________________________________

BRIAN T. TANIGUCHI, Chair