STAND. COM. REP. 2852

Honolulu, Hawaii

, 2004

RE: S.B. No. 2002

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2002 entitled:

"A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM,"

begs leave to report as follows:

The purpose of this measure is to allow conservation and resources enforcement officers to have similar retirement benefits afforded to other law enforcement officers.

Specifically, this measure:

(1) Establishes a definition of "conservation and resources enforcement officer" within chapter 88, Hawaii Revised Statutes, relating to the Employees' Retirement System;

(2) Establishes the vocation of conservation and resources enforcement officer as a contributory class B member of the Employees' Retirement System;

(3) Requires conservation and resources enforcement officers to pay a total of twelve and two-tenths per cent of their salary toward their retirement benefits;

(4) Establishes the pension accrual rate for conservation and resources enforcement officers, who, after June 30, 2004, have at least ten years of credited service, of which the last five years have been spent as a conservation and resources enforcement officer, at two and one-half per cent annually as the percentage rate to be used when calculating their retirement benefit;

(5) Enables conservation and resources enforcement officers with twenty-five years of service, of which at least the last five years have been spent in that capacity, to retire, regardless of age, with a retirement benefit that has not been actuarially reduced;

(6) Allows existing conservation and resources enforcement officers who are noncontributory class C members to elect to become a contributory class B member of the Employees' Retirement System; and

(7) Declares that all prospective conservation and resources enforcement officers hired after the effective date of the measure are to be contributory class B members of the Employees' Retirement System.

Your Committee finds that conservation and resources enforcement officers are commissioned with police powers to enforce the State's conservation and natural resources laws and face many of the same perils, difficulties, and stresses of their law enforcement and public safety brethren. However, these officers are not provided with the same retirement benefits as certain other law enforcement and public safety officers.

Under existing law, police officers and firefighters enjoy enhanced retirement benefits that include:

(1) A higher pension accrual rate than the one that is provided to most other contributory class employees (2.5 per cent vs. 2.0 per cent per year of credited service); and

(2) An ability to retire after twenty-five years of service, regardless of age, with a full pension unreduced for age.

However, these enhanced retirement benefits are not gained without certain costs to the employee. In addition to the potentially hazardous working conditions under which these employees work, contributory class B members:

(1) Pay a higher percentage of their salaries toward their retirement as opposed to most other contributory class members (12.2 per cent vs. 7.8 per cent per year of credited service);

(2) Are not eligible to receive Social Security benefits; and

(3) Have a cap on their pension amount (80 per cent of their average final compensation).

Your Committee finds that the vocation of conservation and resources enforcement officer is not a class of employment that is exempted from contributing to the Social Security program. Consequently, including these officers in the contributory membership class that requires a higher percentage contribution toward their retirement may result in an unanticipated financial burden. As such, your Committee believes that the more prudent approach to ameliorating the retirement benefit disparity between conservation and resources enforcement officers and other law enforcement and public safety officers is to provide them with the ability to retire after twenty-five years of service, regardless of age, with a retirement benefit that is not reduced for actuarial purposes.

Your Committee also finds that, like conservation and resources enforcement officers, deputy sheriffs are officers commissioned with full or similar police powers. However, they are also not eligible to retire after twenty-five years of service without penalty, regardless of age upon retirement.

In addition, your Committee further finds that corrections officers who are noncontributory class C members of the Employees' Retirement System are unable to retire after twenty-five years of service without suffering an actuarially-reduced pension. This is not congruent with what is already being provided to their contributory class counterparts. Your Committee believes that this inequity should also be resolved.

In light of these findings, your Committee has amended the measure by:

(1) Adding a definition for "deputy sheriff";

(2) Deleting the provisions that would instate conservation and resources enforcement officers as contributory class B members of the Employees' Retirement System and require them to make increased contributions toward their retirement;

(3) Adding conservation and resources enforcement officers and deputy sheriffs who are already contributory class A members of the Employees' Retirement System to the group that may retire after twenty-five years of credited service on or after July 1, 2004, regardless of age, without having their retirement benefits reduced for actuarial purposes;

(4) Adding conservation and resources enforcement officers, corrections officers, and deputy sheriffs who are noncontributory class C members of the Employees' Retirement System to the group that may retire after twenty-five years of credited service on or after July 1, 2004, regardless of age, without having their retirement benefits reduced for actuarial purposes; and

(5) Making technical, nonsubstantive amendments for clarity and consistency.

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. 2002, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2002, S.D. 1.

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

____________________________

BRIAN T. TANIGUCHI, Chair