REPORT TITLE:
Employees' Retirement System


DESCRIPTION:
Establishes a rate of one and one-fourth per cent for each year
of credited membership service for qualifying members of the
employees' retirement system (ERS), whether noncontributory or
contributory, to receive military service credit at no cost.
Allows qualifying ERS members to purchase additional service
credits at specified rates.  Enables ERS members to receive a
refund for lump sum payments or additional deductions from their
compensation to obtain membership service credit for active
military service.  (HB564 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        564
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM. 


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

 1      SECTION 1.  Section 88-132.5, Hawaii Revised Statutes, is
 
 2 amended as follows:
 
 3      1.  By amending subsections (a) and (b) to read:
 
 4      "(a)  Any employee who becomes a member of the system in
 
 5 accordance with section 88-42 after June 17, 1996, and has
 
 6 rendered honorable active military service in the armed forces of
 
 7 the United States, may be credited with membership service credit
 
 8 for active military service of up to four years or the actual
 
 9 number of years of active military service, whichever is less, as
 
10 follows:
 
11      (1)  Any member with ten years of credited service in the
 
12           system may be credited with up to two years of
 
13           membership service credit[;] at the rate of one and
 
14           one-fourth per cent for each year of credited service;
 
15      (2)  Any member with twenty years of credited service in the
 
16           system may be credited with up to three years of
 
17           membership service credit[;] at the rate of one and
 
18           one-fourth per cent for each year of credited service;
 
19           and
 

 
Page 2                                                     564
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (3)  Any member with twenty-five years of credited service
 
 2           in the system may be credited with up to four years of
 
 3           membership service credit[.] at the rate of one and
 
 4           one-fourth per cent for each year of credited service.
 
 5      (b)  Any employee who became a member of the system in
 
 6 accordance with section 88-42 before June 18, 1996, and has
 
 7 rendered honorable active military service in the armed forces of
 
 8 the United States, may be credited with membership service credit
 
 9 for active military service of up to four years or the actual
 
10 number of years of active military service, whichever is less, as
 
11 follows:
 
12      (1)  Any member with eight years of credited service in the
 
13           system may be credited with up to two years of
 
14           membership service credit[;] at the rate of one and
 
15           one-fourth per cent for each year of credited service;
 
16      (2)  Any member with twenty years of credited service in the
 
17           system may be credited with up to three years of
 
18           membership service credit[;] at the rate of one and
 
19           one-fourth per cent for each year of credited service;
 
20           and
 
21      (3)  Any member with twenty-five years of credited service
 
22           in the system may be credited with up to four years of
 
23           membership service credit[.] at the rate of one and
 
24           one-fourth per cent for each year of credited service."
 

 
Page 3                                                     564
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      2.  By amending subsection (f) to read:
 
 2      "(f)  [A contributory member's active military service shall
 
 3 be considered service in the member's occupation at the time that
 
 4 service is credited and shall be purchased at the rate specified
 
 5 in section 88-45, and the retirement allowance provided by that
 
 6 service shall be calculated as provided in section 88-74.]
 
 7 Members may purchase additional membership service credit at the
 
 8 following rates:
 
 9      (1)  One and one-fourth per cent per year for class A
 
10           members;
 
11      (2)  Two and one-fourth per cent per year for class B
 
12           members; and
 
13      (3)  Three-fourths per cent per year for class C members."
 
14      SECTION 2.  Notwithstanding any law to the contrary, members
 
15 who have made lump sum payments or additional deductions from
 
16 their compensation to obtain membership service credit for active
 
17 military service shall receive a refund for all payments and
 
18 deductions made up to the amount credited under section 88-132.5,
 
19 Hawaii Revised Statutes.
 
20      SECTION 3.  There is appropriated out of the general
 
21 revenues of the State of Hawaii the sum of $          or so much
 
22 thereof as may be necessary for fiscal year 2000-2001 to fund the
 
23 refunds authorized in section 2 of this Act.
 

 
Page 4                                                     564
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      The sum appropriated shall be expended by the employees'
 
 2 retirement system for the purposes of this Act.
 
 3      SECTION 4.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 5.  This Act shall take effect on July 1, 2005, and
 
 6 shall be effective retroactive to July 1, 1989.