STAND. COM. REP. NO.2725

Honolulu, Hawaii

, 2002

RE: S.B. No. 3078

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 3078, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO LEAVES OF ABSENCE,"

begs leave to report as follows:

The purpose of this measure is to void certain beneficiary designations for earned and unpaid wage purposes if the employee has undergone a significant life change that would make keeping a pre-designated beneficiary contrary to the deceased employee's wishes.

At present, when an employee dies, the employee's accumulated or current accrued vacation allowance and unpaid wages will go to one or more beneficiaries designated by the employee. Your Committee finds that a problem arises when the employee designates a beneficiary, and then experiences a significant life change such as divorce, marriage, or death, and fails to redesignate a more appropriate beneficiary. A classic example is the employee who designates his wife, then divorces her and remarries, but fails to change his designation. In that situation, all benefits will go to his ex-wife, which is probably not what the employee intended.

This bill provides that designations of beneficiaries will be void if (1) the beneficiary predeceases the employee; (2) the employee is divorced from the beneficiary; (3) the employee is unmarried and subsequently gets married; or (4) the employee enters into or terminates a reciprocal beneficiary relationship.

Your Committee has amended this bill to clarify that if an employee has two or more beneficiaries, and one beneficiary is voided, the others will not be voided. Your Committee has also amended condition (3), in which the employee is unmarried and later married, to provide that it applies only when the employee makes the designation prior to the marriage. An additional change was made to condition (4), relating to reciprocal beneficiaries, to provide that the designation is only void if made prior to a reciprocal relationship, or, if made during a reciprocal relationship, it is void if the relationship is then terminated.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3078, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3078, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair