HOUSE OF REPRESENTATIVES

H.B. NO.

2445

TWENTY-EIGHTH LEGISLATURE, 2016

H.D. 1

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PUBLIC EMPLOYEES.

 

 

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

 


     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

privatized employees' retirement system benefits

     §   -1  Findings and purpose.  The purpose of this chapter is to ensure, to the extent possible, that a public employee whose position is privatized, and as a consequence of the privatization the employee's membership and eligibility for continued participation in the pension benefits provided by the employees' retirement system has terminated, will be entitled to receive future retirement benefits under the system commensurate with the prior contributions made by the employee or made on the employee's behalf upon the privatization of the employee's position.

     §   -2  Definitions.  As used in this chapter, unless the context clearly indicates otherwise, the following terms shall mean as follows:

     "Board" means the board of trustees of the employees' retirement system.

     "Employees' retirement system" or "system" means the employees' retirement system of the State of Hawaii.

     "Privatized" means an action by state or county government or those governments' political subdivisions that separates any portion of the respective government or subdivision's operations or facility, or both, and results in the conversion of a full-time, permanent public employment position to a private sector position and the separation from service of any full-time, permanent public employee occupying the converted position.

     "Public employee" means any person occupying a full-time, permanent position in state or county government or those governments' political subdivision, regardless of whether the position is subject to chapter 76 or 89.

     §   -3  Eligible employees.  A public employee may be eligible for coverage under this chapter if the public employee's position is one that meets the following criteria:

     (1)  The operation of the government function or facility is assumed by an employer other than the State or its political subdivisions or the government function or facility is purchased by an employer other than the State or its political subdivisions;

     (2)  The employee's termination from public employment is due to privatization of the employee's position; and

     (3)  The employee's active membership in the employees' retirement system consequently terminates.

     §   -4  Coverage determination.  (a)  The head of the governmental agency with jurisdiction over the governmental function or facility to be privatized may submit a resolution from the corporation to the board of trustees of the employees' retirement system that:

     (1)  Supports providing coverage under this chapter for an eligible employee of the program that performs the governmental function or the facility whose position is privatized; and

     (2)  States that the governmental agency with jurisdiction over the governmental function or facility to be privatized will pay for actuarial calculations, as further specified in subsection (c).

     (b)  The governmental agency with jurisdiction over the governmental function or facility to be privatized shall provide a copy of any applicable purchase or lease agreement and any other information requested by the board to allow the board to verify that under the proposed change in employers, the new employer is not the State or any of its political subdivisions, rendering the eligible employee otherwise ineligible for continued coverage as an active member of the employees' retirement system.

     (c)  Following receipt of a resolution and a determination by the board that the new employer is not the State or any of its political subdivisions, the board shall direct its actuary to determine whether the system, if coverage under this chapter is provided, is expected to receive a net gain or a net loss if privatization occurs.  A net gain is expected if the actuarial liability of the special benefit coverage provided under this chapter, if extended to the eligible employee under the privatization, is less than the actuarial gain otherwise to accrue to the system.  A net loss is expected if the actuarial accrued liability of the special benefit coverage provided under this chapter, if extended to the eligible employee under the privatization, is more than the actuarial gain otherwise to accrue to the system.  The date of the actuarial calculations used to make this determination shall be within one year of the effective date of privatization.

     §   -5  Reporting privatization.  (a)  If the actuarial calculations under section    -4(c) indicate that privatization can be approved because a net gain to the system is expected, or if subsection (b) applies, the board shall extend coverage to the eligible employee.

     (b)  If the calculations under section    -4(c) indicate a net loss to the system, the board shall extend coverage to the eligible employee if the governmental agency with jurisdiction over the governmental function or facility to be privatized submits a resolution that specifies that a lump sum payment shall be made to the system that is equal to the net loss, plus interest.  Payment shall be made on or after the effective date of privatization.

     (c)  The system shall maintain a list that includes the names of all privatized former public employees in the system's annual report to the legislature and on the system's website.

     §   -6  Effect on privatized employee.  An eligible employee who is extended coverage under this chapter shall be treated as, or continue to be treated as, a member of the system for all rights and benefits as if privatization had not occurred, including class membership, vesting, early retirement, disability retirement, death benefits, and return to service of a retirant.  The employee's membership class shall be determined as the class in which the employee belonged on the day prior to the privatization of the employee's public employment position.

     §   -7  Counseling services.  Prior to the privatization of a government function or facility, the board shall provide the public employees performing the governmental function or employed by the facility to be privatized with counseling on the employees' benefits available under the system and this chapter."

     SECTION 2.  This Act shall take effect on January 7, 2059.

 



Report Title:

Public Employees; Privatization; Retirement Benefits

 

Description:

Ensures future ERS benefits for public employees who are terminated from public employment due to the privatization of the employees' positions.  Effective January 7, 2059.  (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.