HOUSE OF REPRESENTATIVES

H.B. NO.

2665

TWENTY-FIFTH LEGISLATURE, 2010

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to deferred compensation plans.

 

 

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

 


     SECTION 1.  The legislature finds that the unprecedented global economic downturn has affected Hawai`i in a dramatic and harmful way.  Coming into this fiscal year, the legislature and the administration have cut over two billion dollars from the state budget, and have implemented targeted tax increases.  Collective bargaining has also yielded furloughs and pay cuts, and the private sector has already lost many businesses and laid off hundreds of workers.  The effects of the downturn have very real consequences for those who were laid off or furloughed, not the least of which is finding the funds to pay the bills, such as the mortgage or medical bills.

     Accordingly, the purpose of this Act is to allow state employees to withdraw funds from their deferred compensation plans upon a showing of financial hardship.

     SECTION 2.  Chapter 88E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§88E-    Financial hardship; withdrawal.   (a)  An employee may withdraw funds from their deferred compensation plan established under this chapter upon a showing of financial hardship.  Such withdrawal shall be in an amount no greater than necessary to relieve the financial hardship.

     (b)  Such withdrawals shall be allowed upon the submission of application forms adopted by the board.  Dispersal of funds shall occur no later than three working days after submission of the application form.  The minimal showing necessary for such a withdrawal shall include:

          (1)  the name, address, and phone number of the employee;

          (2)  a description of the circumstances leading to the financial hardship; and

          (3)  expenses that cannot be paid due to financial hardship and the specific amounts of the stated expenses.

     (c)  The board may review such application forms after the withdrawal of funds.  Should the board find that the withdrawal of funds conflict with federal law of regulations, the board shall have the power to compel repayment of the withdrawn funds from the employee.  Such repayment shall be accomplished through an increase in payroll deduction for the employee's deferred compensation plan, but in no case shall the increase be greater than fifty per cent of the amount deducted immediately prior to the withdrawal application."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

 

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

State deferred compensation plan

 

Description:

Allows for withdrawal of deferred compensation plan funds upon showing of financial hardship by employee.

 

 

 

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