REPORT TITLE:
Employee Benefits/UH/DOE


DESCRIPTION:
Authorizes the University of Hawaii and the department of
education to establish custodial accounts for the deposit of
annuity payments of employees of the University of Hawaii and the
department of education.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1721       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                   A  BILL  FOR  AN  ACT

RELATING TO EMPLOYEE BENEFIT PLANS.


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

 1      SECTION 1.  Chapter 303, Hawaii Revised Statutes, is amended
 
 2 as follows:
 
 3      1.  By adding a new section to read:
 
 4      "�303-    Limitation on liability.  The State, the
 
 5 department of education, or the University of Hawaii shall not be
 
 6 liable for sums deferred or the performance of any investment
 
 7 product purchased as part of any 401(k), 403(b) insurance
 
 8 annuity, or 403(b)(7) mutual fund custodial account under this
 
 9 chapter.  The State, the department of education, or the
 
10 University of Hawaii shall be held harmless from any and all
 
11 claims (including claims of companies, employees, or
 
12 beneficiaries), demands, losses, liabilities, or expenses
 
13 including attorney fees and costs of defense."
 
14      2.  By amending the title to read:
 
15                           "CHAPTER 303
 
16        EMPLOYEES' ANNUITY AND CUSTODIAL ACCOUNT CONTRACTS"
 
17      3.  By amending section 303-1, Hawaii Revised Statutes, to
 
18 read:
 
19      "�303-1 Purpose.  The purpose of this chapter is to provide
 
20 the means by which employees of the department of education and
 

 
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 1 the University of Hawaii may qualify for the favorable benefits
 
 2 of section 403(b) of the Internal Revenue Code of [1954,] 1986,
 
 3 as amended."
 
 4      4.  By amending section 303-2, Hawaii Revised Statutes, to
 
 5 read:
 
 6      "�303-2 Contract for purchase of annuity[.] or investment
 
 7 in custodial account.  The department of education and the
 
 8 University of Hawaii, on behalf of any employee of the respective
 
 9 institutions, may enter into a written agreement with any [such]
 
10 employee to purchase for the employee [an]:
 
11      (1)  An annuity contract from an insurer who holds a
 
12           certificate of authority under section 431:3-201 [or
 
13           who offers an];
 
14      (2)  An annuity contract qualified under section 401(k) of
 
15           the Internal Revenue Code[,] of 1986, as amended, which
 
16           provides a nationwide retirement trust for a group of
 
17           college or university football coaches who, due to the
 
18           nature of their jobs, change employers frequently.
 
19      The department of education or the University of Hawaii may
 
20 pay amounts to a custodial account established on behalf of the
 
21 employee pursuant to section 403(b)(7) of the Internal Revenue
 
22 Code of 1986, as amended."
 

 
 
 
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 1      5.  By amending section 303-3, Hawaii Revised Statutes, to
 
 2 read:
 
 3      "�303-3 [Premium withholding.] Agreement to pay amounts.
 
 4 The department of education and the University of Hawaii may also
 
 5 enter into an agreement under which the employer shall withhold
 
 6 from the salary of the employee the [amount of the premiums
 
 7 payable on account of] amounts paid to the annuity contract[,] or
 
 8 custodial account, and shall make [such premium] the payments on
 
 9 behalf of the employee."
 
10      6.  By amending section 303-4, Hawaii Revised Statutes, to
 
11 read:
 
12      "�303-4 Adoption of rules.  Each employer may adopt rules
 
13 to implement this chapter including, but not [by way of
 
14 limitation,] limited to:
 
15      (1)  [the] The method of filing an election to accept an
 
16           adjustment in earnings and revocation of the
 
17           election[,];
 
18      (2)  [the] The effective date of an election[,];
 
19      (3)  [changes] Changes in the amount of the adjustment in
 
20           earnings[,]; and 
 
21      (4)  [selection] Selection of the insurance company or
 
22           companies from which the annuity contracts are to be
 

 
 
 
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                                     H.B. NO.1721       
                                                        
                                                        

 
 1           purchased[.] or to which payments into a qualified
 
 2           custodial account are to be made."
 
 3      SECTION 2.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 3.  This Act shall take effect on January 1, 2000.
 
 6 
 
 7                           INTRODUCED BY:  _______________________