Report Title:

Employees' Retirement System; Class H

 

Description:

Re-opens election and membership into class H until 7/1/09. Effective 07/01/2059. (HB2755 HD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2755

TWENTY-FOURTH LEGISLATURE, 2008

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM.

 

 

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

 


     SECTION 1.  Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to part VIII to be appropriately designated and to read as follows:

     "§88-    Election to membership from July 1, 2008 to July 1, 2009.  (a)  This section shall apply to employees who did not make the election to become a class H member pursuant to section 88-321, and effective July 1, 2006.

     (b)  Any employee eligible to become a class H member under section 88-321 and who did not make the election to become a class H member effective July 1, 2006, pursuant to section 88‑321(a), may elect to become a class H member effective July 1, 2009.  This section shall apply whether:

     (1)  The member was in service on June 30, 2006, or returned to service after June 30, 2006; or

     (2)  The member entered service after June 30, 2006.

     (c)  The election to become a class H member under this section shall become effective on July 1, 2009, and shall be irrevocable."

     SECTION 2.  Section 88-47, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There shall be four classes of members in the system to be known as class A, class B, class C, and class H, defined as follows:

     (1)  Class A shall consist of:

         (A)  Judges, elected officials, and legislative officers;

         (B)  Investigators of the department of the attorney general, narcotics enforcement investigators, water safety officers not making the election under section 88-271, and public safety investigations staff investigators;

         (C)  Those members in service prior to July 1, 1984, including those who are on approved leave of absence, not making the election to become a class C member as provided in part VII or to become a class H member as provided in part VIII;

         (D)  The following members in service prior to July 1, 2006, or July 1, 2009, as applicable, including those who are on approved leave of absence, not making the election to become a class H member as provided in [part VIII:] section 88-321 or 88‑   :

              (i)  Members whose salaries are set forth in sections 26-52 and 26-53 and their county counterparts, managing directors or an administrative assistant to the mayor, other county department heads, and agency heads appointed and subject to removal by the mayor;

             (ii)  First deputies appointed by the county attorney and prosecuting attorney;

            (iii)  The county clerk and deputy county clerk of each county;

             (iv)  The directors of the offices of council services of the county of Maui and the city and county of Honolulu;

              (v)  The administrative director of the courts;

             (vi)  The deputy administrative director of the courts;

            (vii)  The executive officer of the labor and industrial relations appeals board; and

           (viii)  The executive officer of the Hawaii labor relations board;

         (E)  All former class A retirants who return to employment after June 30, 1984, requiring the retirant's active membership; and

         (F)  All former class B retirants who return to employment requiring the retirant's active membership, except for:

              (i)  Former retirants who return in the positions of police officer or firefighter;

             (ii)  Former retirants who were members on July 1, 1957, who elected not to be covered by the Social Security Act; and

            (iii)  Former retirants who were in positions to which coverage under Title II of the Social Security Act was not extended who entered membership after June 30, 1957, but before January 1, 2004;

     (2)  Class B shall consist of:

         (A)  Police officers and firefighters, including former retirants who return to service in such capacity;

         (B)  All employees, including former retirants, who were members on July 1, 1957, who elected not to be covered by the Social Security Act; and

         (C)  All employees, including former retirants, in positions to which coverage under Title II of the Social Security Act is not extended, who enter membership after June 30, 1957, but before January 1, 2004, not making the election to become a class H member as provided in part VIII;

     (3)  Except for members described in paragraphs (1) and (2), class C shall consist of all employees, not making the election to become a class H member as provided in part VIII, who:

         (A)  First enter service after June 30, 1984, but before July 1, [2006;] 2009;

         (B)  Reenter service after June 30, 1984, but before July 1, [2006,] 2009, without vested benefit status as provided in section 88-96(b);

         (C)  Make the election to become a class C member as provided in part VII; or

         (D)  Are former class C retirants who return to service requiring the retirant's active membership; [and]

         and

     (4)  Except for members described in paragraphs (1) and (2), class H shall consist of all employees who:

         (A)  First enter service after June 30, 2006;

         (B)  Reenter service after June 30, 2006, without vested benefit status as provided in section 88‑96(b);

         (C)  Make the election to become a class H member as provided in part VIII; or

         (D)  Are former class H retirants who return to service requiring the retirant's active membership."

     SECTION 3.  Section 88-322, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(a)  Class C members who are in service on June 30, 2006, or June 30, 2009, as applicable, and make the election to become class H members pursuant to section 88‑321(a)[,] or 88‑   , shall have the option to convert some or all of their class C credited service, as of June 30, 2006, or June 30, 2009, as applicable, to class H credited service by paying the full actuarial cost of the conversion as of June 30, 2006, or June 30, 2009, as applicable, in the manner provided in subsection (d).  The option to convert class C credited service to class H credited service shall also apply:

     (1)  To forfeited credit for previous service that a member is eligible to have restored as of June 30, 2006[;] or June 30, 2009, as applicable; and

     (2)  To membership service credit that a member is eligible to claim under section 88‑272(4) to (6) as of June 30, 2006[;] or June 30, 2009, as applicable;

provided that the member shall claim the forfeited service credit and the membership service credit by the date established by the board at a meeting held pursuant to chapter 92.

     (b)  All class A and class B credited service of class A or class B members who make the election to become class H members pursuant to section 88-321(a) shall be converted to class H credited service.  The cost of the conversion of class A or class B credited service shall be the member's accumulated contributions as of the date of conversion.  Verified membership service credit paid for pursuant to section 88-59 under an irrevocable payroll authorization entered into prior to July 1, 2006, or July 1, 2009, as applicable, shall be credited as class H credited service.  Class A and class B members who are in service on June 30, 2006, or June 30, 2009, as applicable, and make the election to become class H members pursuant to section 88-321(a) or 88-    shall have the option to convert some or all of their class C credited service, as of June 30, 2006, or June 30, 2009, as applicable, to class H credited service by paying, in the manner provided in subsection (d), the full actuarial cost of the conversion as of the last day of the sixth calendar month preceding the date of the notice described in subsection (e).  The option to convert class C credited service to class H credited service shall also apply:

     (1)  To forfeited credit for previous service that a member is eligible to have restored as of June 30, 2006[;] or June 30, 2009, as applicable; and

     (2)  To membership service credit that a member is eligible to claim under section 88-272(4) to (6) as of June 30, 2006[;] or June 30, 2009, as applicable;

provided that the member shall claim the forfeited service credit and the membership service credit by the date established by the board at a meeting held pursuant to chapter 92."

     SECTION 4.  Section 88-324, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  Under rules as the board may adopt, any class H member may file with the system a statement of all service as an employee or other service paid for by the State or a county rendered prior to the member last becoming a member that is not credited to the member, for which the member claims prior service credit, and also a statement of the services for which the member claims membership service credit and, except as provided in subsection (d) or with respect to service credit paid for pursuant to section 88-59 under an irrevocable payroll authorization entered into prior to July 1, 2006, or July 1, 2009, as applicable, or to forfeited service to which subsection (e) is applicable, for which the member agrees to have additional deductions made from the member's compensation or to make a lump sum payment as described in this section.

     After the filing of the statement by the member, the system shall verify the service claimed and determine the service credit allowable."

     2.  By amending subsections (c) and (d) to read:

     "(c)  Verified membership service for which a former class A or class B member in service on June 30, 2006, or June 30, 2009, as applicable was eligible as of June 30, 2006, or June 30, 2009, as applicable, but failed to claim by the date established by the board pursuant to section 88-322(b), shall be paid for in any one of the following methods, at the member's option:

     (1)  By deductions from the member's compensation pursuant to section 414(h)(2) of the Internal Revenue Code of 1986, as amended, under the employer pick up plan under section 88-326.  An irrevocable payroll authorization filed by the member for a period not to exceed sixty months shall remain in effect until the completion of the payroll payments or termination of employment, whichever is earlier.  The amount of service credit that may be acquired pursuant to this method shall not exceed the period over which the payroll payments are made.  The member may elect to have:

         (A)  Deductions from the member's compensation of twice the contribution rate applicable to the member under section 88-45 as of June 30, 2006, or June 30, 2009, as applicable, over a period equal to the period for which membership service credit is allowable, not to exceed sixty months; or

         (B)  Deductions from the member's compensation of one and one-half times the contribution rate applicable to the member under section 88‑45 as of June 30, 2006, or June 30, 2009, as applicable, over a period equal to twice the period for which membership service credit is allowable, not to exceed sixty months; [or]

         or

     (2)  By lump sum payment of contributions computed at the contribution rate applicable to the member under section 88-45 as of June 30, 2006, or June 30, 2009, as applicable, applied to the member's monthly rate of compensation at the time of payment, multiplied by the number of months for which membership service credit is allowable.

The deductions from compensation or lump sum payment shall be paid to the system and shall be credited to the member's individual account and become part of the member's accumulated contributions.

     Class H membership service credit in addition to any other service credited to the member shall be allowed for the period for which the deductions from compensation or lump sum payment have been made in accordance with this subsection.

     (d)  Verified prior service and verified membership service for which a former class C member in service on June 30, 2006, or June 30, 2009, as applicable, was eligible as of June 30, 2006, or June 30, 2009, as applicable, but failed to claim by the date established by the board pursuant to section 88‑322(a), shall be credited at no cost as class C credited service."

     3.  By amending subsection (f) to read:

     "(f)  Forfeited class A or class B credited service being acquired under an irrevocable payroll authorization entered into under section 88-59 prior to July 1, 2006, or July 1, 2009, as applicable, shall be credited as class H credited service."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2059.