HOUSE OF REPRESENTATIVES

H.B. NO.

393

THIRTIETH LEGISLATURE, 2019

H.D. 1

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND.

 

 

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

 


SECTION 1. Chapter 87A, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"87A-   Fiduciary duties; prohibited transactions. (a) A fiduciary of the trust fund shall comply, with respect to a plan, with all fiduciary duties imposed on fiduciaries under title 29 United States Code sections 1001-1191c, as amended, and related regulations.

(b) All fiduciaries of the trust fund shall discharge their duties with respect to a plan solely in the interest of the employee-beneficiaries and:

(1) For the exclusive purpose of:

(A) Providing benefits to employee-beneficiaries; and

(B) Defraying reasonable expenses of administering the plan;

(2) With the care, skill, prudence, and diligence under the circumstances that a prudent person acting in a similar capacity and familiar with those matters would use in the conduct of an enterprise of a similar character and with like aims;

(3) Diversify the investments of the plan so as to minimize the risk of large losses, unless, under the circumstances, it is clearly prudent not to do so; and

(4) Act in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this chapter.

(c) In addition to any liability that a fiduciary may have under this chapter, a fiduciary with respect to a plan shall be liable for a breach of fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances:

(1) If the fiduciary participates knowingly in, or knowingly undertakes to conceal, an act of omission of the other fiduciary, knowing that act or omission is a breach;

(2) If, by the fiduciary's failure to comply with subsection (a) or (b), the fiduciary has enabled the other fiduciary to commit a breach; or

(3) If the fiduciary has knowledge of the breach by the other fiduciary, unless the other fiduciary makes reasonable efforts under the circumstances to remedy the breach.

If the assets of the plan are held by two or more trustees, each shall use reasonable care to prevent a co-trustee from committing a breach, and each shall be responsible for jointly managing and controlling the assets of the plan.

(d) A fiduciary shall not cause a plan to engage in a transaction, if the fiduciary knows or should know that the transaction constitutes a direct or indirect:

(1) Sale or exchange, or leasing, of any property between the plan and a party in interest;

(2) Lending of money or other extension of credit between the plan and a party in interest;

(3) Furnishing of goods, services, or facilities between the plan and a party in interest; or

(4) Transfer to, or use by or for the benefit of, a party in interest, of any assets of the plan.

(e) A fiduciary shall not:

(1) Deal with the assets of the plan in the fiduciary's own interest or for the fiduciary's own personal account;

(2) In the fiduciary's individual capacity or in any other capacity act in any transaction involving the plan on behalf of a party, or represent a party, whose interests are adverse to the interests of the plan or the interests of its employee-beneficiaries; or

(3) Receive any consideration for the fiduciary's own personal account from any party dealing with the plan in connection with a transaction involving the assets of the plan.

For the purposes of this section, a "fiduciary" or "fiduciary of the trust fund" shall mean a member of the board of trustees."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect on January 1, 2050.



 

Report Title:

Employer-union Health Benefits Trust Fund; Fiduciary Duties; Prohibited Transactions; Liabilities; Trustees

 

Description:

Creates a fiduciary duty on Employer-Union Health Benefits Trust Fund trustees. Prohibits transactions where the trustee has a conflict of interest. Establishes liabilities for breach of fiduciary duty. Takes effect 1/1/2050. (SD1)

 

 

 

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