REPORT TITLE:
Maximum Retirement Allowance


DESCRIPTION:
Limits the maximum allowance to 80 percent of the average final
compensation (AFC) for contributory members, 70 percent of the
AFC for ordinary disability for contribution members, and 50
percent of the AFC for service, ordinary disability, and service-
connected disability for all noncontributory members.  (HB1047
HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1047
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MAXIMUM RETIREMENT ALLOWANCE.



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

 1      SECTION 1.  Section 88-74, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "88-74  Allowance on service retirement.  Upon retirement
 
 4 from service, a member shall receive a retirement allowance as
 
 5 follows:
 
 6      (1)  If the member has attained age fifty-five, a retirement
 
 7           allowance of two per cent of the member's average final
 
 8           compensation multiplied by the total number of years of
 
 9           the members's credited service as a class A and B
 
10           member, excluding any credited service as an elective
 
11           officer or legislative officer, plus a retirement
 
12           allowance of one and one-fourth per cent of the
 
13           member's average final compensation multiplied by the
 
14           total number of years of prior credited service as a
 
15           class C member; provided that no retirement allowance
 
16           shall exceed eighty per cent of the member's average
 
17           final compensation; provided further that:
 
18           (A)  After June 30, 1968, if the member has at least
 
19                ten years of credited service of which the last
 
20                five or more years prior to retirement [is] are
 

 
Page 2                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                credited service as a firefighter, police officer,
 
 2                or an investigator of the department of the
 
 3                prosecuting attorney;
 
 4           (B)  After June 30, 1977, if the member has at least
 
 5                ten years of credited service of which the last
 
 6                five or more years prior to retirement [is] are
 
 7                credited service as a corrections officer;
 
 8           (C)  After June 16, 1981, if the member has at least
 
 9                ten years of credited service of which the last
 
10                five or more years prior to retirement [is] are
 
11                credited service as an investigator of the
 
12                department of the attorney general;
 
13           (D)  After June 30, 1989, if the member has at least
 
14                ten years of credited service of which the last
 
15                five or more years prior to retirement [is] are
 
16                credited service as a narcotics enforcement
 
17                investigator;
 
18           (E)  After December 31, 1993, if the member has at
 
19                least ten years of credited service of which the
 
20                last five or more years prior to retirement [is]
 
21                are credited service as a water safety officer;
 
22                and
 

 
 
 
Page 3                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (F)  After June 30, 1994, if the member has at least
 
 2                ten years of credited service, of which the last
 
 3                five or more years prior to retirement are
 
 4                credited service as a public safety investigative
 
 5                staff investigator;
 
 6           then for each year of service as a firefighter, police
 
 7           officer, corrections officer, investigator of the
 
 8           department of the prosecuting attorney, investigator of
 
 9           the department of the attorney general, narcotics
 
10           enforcement investigator, water safety officer, or
 
11           public safety investigations staff investigator, the
 
12           retirement allowance shall be two and one-half per cent
 
13           of the member's average final compensation.  The
 
14           maximum retirement allowance for those members shall
 
15           not exceed eighty per cent of the member's average
 
16           final compensation.  If the member has not attained age
 
17           fifty-five, the member's retirement allowance shall be
 
18           computed as though the member had attained age
 
19           fifty-five, reduced in accordance with factors of
 
20           actuarial equivalence adopted by the board upon the
 
21           advice of the actuary; provided that no reduction shall
 
22           be made if the member has at least twenty-five years of
 
23           credited service as a firefighter, police officer,
 

 
Page 4                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           corrections officer, investigator of the department of
 
 2           the prosecuting attorney, investigator of the
 
 3           department of the attorney general, narcotics
 
 4           enforcement investigator, public safety investigations
 
 5           staff investigator, sewer worker, or water safety
 
 6           officer, of which the last five or more years prior to
 
 7           retirement [is] are credited service in such
 
 8           capacities;
 
 9      (2)  If the member has made voluntary additional
 
10           contributions for the purchase of an additional annuity
 
11           and has not applied for a refund as permitted by
 
12           section 88-72, the member may accept the refund at the
 
13           time of retirement or, in lieu thereof, receive in
 
14           addition to the retirement allowance provided in
 
15           paragraph (1), an annuity that is the actuarial
 
16           equivalent of the additional contributions with regular
 
17           interest;
 
18      (3)  If the member has credited service as a judge, the
 
19           member's retirement allowance shall be computed on the
 
20           following basis:
 
21           (A)  Irrespective of age, for each year of credited
 
22                service as a judge, three and one-half per cent of
 
23                the member's average final compensation in
 

 
Page 5                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                addition to an annuity that is the actuarial
 
 2                equivalent of the member's accumulated
 
 3                contributions allocable to the period of such
 
 4                service; and
 
 5           (B)  For all other credited service, as provided in
 
 6                paragraphs (1), (2) and (4).  No allowance shall
 
 7                exceed seventy-five per cent of the member's
 
 8                average final compensation.  If the allowance
 
 9                exceeds this limit, it shall be adjusted by
 
10                reducing the annuity included in subparagraph (A),
 
11                and the portion of the accumulated contributions
 
12                specified in that subparagraph in excess of the
 
13                requirements of the reduced annuity shall be
 
14                returned to the member.
 
15           The allowance for judges under this paragraph, together
 
16           with the retirement allowance provided by the federal
 
17           government for similar service, shall in no case exceed
 
18           seventy-five per cent of the member's average final
 
19           compensation; or
 
20      (4)  If the member has credited service as an elective
 
21           officer or as a legislative officer, the member's
 
22           retirement allowance shall be derived by adding the
 
23           allowances computed separately under subparagraphs (A),
 
24           (B), (C), and (D) as follows:
 

 
Page 6                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (A)  Irrespective of age, for each year of credited
 
 2                service as an elective officer, three and one-half
 
 3                per cent of the member's average final
 
 4                compensation as computed under section
 
 5                88-81(d)(1), in addition to an annuity that is the
 
 6                actuarial equivalent of the member's accumulated
 
 7                contributions allocable to the period of service;
 
 8                and
 
 9           (B)  Irrespective of age, for each year of credited
 
10                service as a legislative officer, three and
 
11                one-half per cent of the member's average final
 
12                compensation as computed under section
 
13                88-81(d)(2), in addition to an annuity that is the
 
14                actuarial equivalent of the member's accumulated
 
15                contributions allocable to the period of service;
 
16           (C)  Irrespective of age, for each year of credited
 
17                service as a judge, three and one-half per cent of
 
18                the member's average final compensation as
 
19                computed under section 8-81(d)(3), in addition to
 
20                an annuity that is the actuarial equivalent of the
 
21                member's accumulated contributions allocable to
 
22                the period of service; and
 

 
 
 
Page 7                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (D)  For each year of credited service not included in
 
 2                subparagraph (A), (B), or (C), the average final
 
 3                compensation as computed under section 88-81(d)(4)
 
 4                shall be multiplied by two per cent, two and one-
 
 5                half per cent, or one and one-quarter per cent, as
 
 6                applicable to the credited service earned as a
 
 7                class A, B, or C member, respectively.
 
 8           The total retirement allowance shall not exceed
 
 9           seventy-five per cent of the member's highest average
 
10           final compensation calculated under section
 
11           88-81(d)(1), (2), (3), or (4).  If the allowance
 
12           exceeds this limit, it shall be adjusted by reducing
 
13           any annuity accrued under subparagraphs (A), (B), and
 
14           (C) and the portion of the accumulated contributions
 
15           specified in these subparagraphs in excess of the
 
16           requirements of the reduced annuity shall be returned
 
17           to the member.  If a member has service credit as an
 
18           elective officer or as a legislative officer in
 
19           addition to service credit as a judge, then the
 
20           retirement benefit calculation contained in this
 
21           paragraph shall supersede the formula contained in
 
22           paragraph (3)."
 

 
 
 
Page 8                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 2.  Section 88-76, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "88-76  Allowance on ordinary disability retirement.  Upon
 
 4 retirement for ordinary disability, a member shall receive a
 
 5 retirement allowance of one and three-fourths per cent of the
 
 6 member's average final compensation for each full year of
 
 7 credited service; except that for each year of credited service
 
 8 as a judge, an elective officer, or a legislative officer, the
 
 9 member shall receive a retirement allowance computed as provided
 
10 in section 88-74(3) or (4), as applicable.  The minimum
 
11 retirement allowance payable under this section shall be thirty
 
12 per cent of the member's average final compensation.  No
 
13 retirement allowance under this section shall exceed seventy per
 
14 cent of the member's average final compensation except as
 
15 provided in section 88-74(3) and (4)."
 
16      SECTION 3.  Section 88-282, Hawaii Revised Statutes, is
 
17 amended by amending subsection (a) to read as follows:
 
18      "(a)  The amount of the annual normal retirement allowance
 
19 payable to a retired member shall be one and one-fourth per cent
 
20 of the average final compensation multiplied by the number of
 
21 years of credited service[.]; provided that no retirement
 
22 allowance shall exceed fifty per cent of the member's average
 
23 final compensation."
 

 
Page 9                                                     1047
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 4.  Section 88-284, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (c) to read as follows:
 
 3      "(c)  A member who is determined to be permanently
 
 4 incapacitated for the further performance of duty pursuant to
 
 5 subsection (a) shall receive an ordinary disability retirement
 
 6 allowance equal to the member's accrued normal retirement
 
 7 allowance unreduced for age[.]; provided that no retirement
 
 8 allowance shall exceed fifty per cent of the member's average
 
 9 final compensation."
 
10      SECTION 5.  Section 88-285, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "[[]88-285[]]  Service connected disability.  A member who
 
13 would be eligible to receive a service connected disability
 
14 retirement allowance pursuant to section 88-79 shall receive a
 
15 retirement allowance equal to the member's accrued normal
 
16 retirement allowance unreduced for age[, but not].  The
 
17 retirement allowance shall be no less than fifteen per cent but
 
18 shall not exceed fifty per cent of the member's average final
 
19 compensation."
 
20      SECTION 6.  Statutory material to be repealed is bracketed.
 
21 New statutory material is underscored.
 
22      SECTION 7.  This Act shall take effect on July 1, 1999.