REPORT TITLE:
Employees' Retirement System


DESCRIPTION:
Allows qualified members of the Employees' Retirement System
(ERS) to purchase their military service credit.  Allows a
surviving spouse of a member of the ERS to remarry and still
receive retirement benefits arising from their former spouse's
employment.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        564
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM. 


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

 1      SECTION 1.  Chapter 88, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "88-    Reinstatement of benefits.  A surviving spouse or
 
 5 reciprocal beneficiary whose benefits under this chapter arose
 
 6 from the spouse's or reciprocal beneficiary's membership with the
 
 7 employees' retirement system, and whose pension or benefit was
 
 8 terminated by reason of remarriage or entry into a reciprocal
 
 9 beneficiary relationship occurring subsequent to the death of the
 
10 member, may apply for reinstatement of the terminated pension or
 
11 benefit.  The level of reinstated pension or benefit payments
 
12 shall be the amount received by the surviving spouse or
 
13 reciprocal beneficiary on the date that the payment was
 
14 terminated, adjusted to reflect ad hoc and scheduled increases
 
15 from the date of termination to the date of reinstatement."
 
16      SECTION 2.  Section 88-1, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "88-1 Restrictions.  The provisions of this section shall
 
19 be applicable to every pension and to every recipient or
 

 
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 1 beneficiary thereof, granted or provided for by any special act
 
 2 of the legislature (other than benefits, or the recipients
 
 3 thereof, payable to beneficiaries or retirants of the employees'
 
 4 retirement system under [part II)] parts II and VII) whether the
 
 5 pension be payable by the State or by any county, or by any
 
 6 board, commission, bureau, department, or other agency thereof:
 
 7      (1)  No recipient or beneficiary shall be permitted to draw
 
 8           any pension, or any portion thereof, in excess of $50
 
 9           per month, while the recipient or beneficiary is
 
10           holding any salaried position or office in, under, or
 
11           by authority of the United States, the State, or any
 
12           political subdivision thereof.  This paragraph shall
 
13           not apply to any recipient or beneficiary who is
 
14           elected to the legislature or to the council of any
 
15           county[.];
 
16      (2)  If the recipient or beneficiary is a surviving spouse
 
17           or reciprocal beneficiary, the pension so granted shall
 
18           [cease when the surviving spouse or reciprocal
 
19           beneficiary remarries, marries, or enters into a new
 
20           reciprocal beneficiary relationship.] continue;
 
21           provided that the surviving spouse or reciprocal
 
22           beneficiary makes the election to continue to receive
 
23           pension and other retirement benefits as provided for
 

 
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 1           in section 88-  ;
 
 2      (3)  Any pension payable to any minor shall cease when the
 
 3           minor reaches the age of eighteen years[.]; and
 
 4      (4)  If any recipient or beneficiary of a pension, having a
 
 5           spouse or reciprocal beneficiary at the time the
 
 6           pension was first granted to the recipient or
 
 7           beneficiary dies, then the spouse or reciprocal
 
 8           beneficiary[, as long as the spouse or reciprocal
 
 9           beneficiary remains unmarried or not in a reciprocal
 
10           beneficiary relationship,] shall be paid sixty per cent
 
11           of the amount of the pension payable to the
 
12           beneficiary[.]; provided that the surviving spouse or
 
13           reciprocal beneficiary makes the election to continue
 
14           to receive pension and other retirement benefits as
 
15           provided for in section 88-  ."
 
16      SECTION 3.  Section 88-85, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "88-85  Accidental death benefit.  Upon the receipt of
 
19 proper proofs of a member's death by the board of trustees, there
 
20 shall be paid to the member's designated beneficiary or to the
 
21 member's estate the amount of the member's accumulated
 
22 contributions and if, upon the receipt of evidence or proofs that
 
23 the death was the natural and proximate result of an accident
 

 
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 1 occurring at some definite time and place while the member was in
 
 2 the actual performance of duty, or that the death was due to the
 
 3 result of some occupational hazard, the board shall decide that
 
 4 the death was the result of an accident in the performance of
 
 5 duty and not caused by wilful negligence on the part of the
 
 6 member, there shall be paid in lieu of the ordinary death
 
 7 benefits provided by the contributions of the State or county, a
 
 8 pension of one-half of the average final compensation of the
 
 9 member:
 
10      (1)  To the surviving spouse or reciprocal beneficiary of
 
11           the member [to continue until the surviving spouse or
 
12           reciprocal beneficiary remarries, marries, or enters
 
13           into a new reciprocal beneficiary relationship]; or
 
14      (2)  If there be no surviving spouse or reciprocal
 
15           beneficiary, or if the surviving spouse or reciprocal
 
16           beneficiary dies or [remarries, marries, or enters into
 
17           a new reciprocal beneficiary relationship] before any
 
18           child of the deceased member shall have attained the
 
19           age of eighteen years, then to the deceased member's
 
20           child or children under such age, divided in such
 
21           manner as the board in its discretion shall determine,
 
22           to continue as a joint and survivor pension of one-half
 
23           of the deceased member's final compensation until every
 

 
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 1           child dies, or attains such age; or
 
 2      (3)  If there is no surviving spouse or reciprocal
 
 3           beneficiary or child under the age of eighteen years
 
 4           surviving the deceased member, then to the deceased
 
 5           member's dependent father or dependent mother, as the
 
 6           deceased member shall have nominated by written
 
 7           designation duly acknowledged and filed with the board,
 
 8           or if there is no such nomination, then to the deceased
 
 9           member's dependent father or to the deceased member's
 
10           dependent mother as the board, in its discretion, shall
 
11           direct to continue for life.
 
12      Notwithstanding any other law to the contrary, any condition
 
13 of impairment of health caused by any disease of the heart,
 
14 lungs, or respiratory system, resulting in death to a
 
15 firefighter, police officer, or sewer worker, shall be presumed
 
16 to have been suffered in the actual performance of duty at some
 
17 definite time and place through no wilful negligence on the
 
18 firefighter's, police officer's, or sewer worker's part, and as a
 
19 result of the inherent occupational hazard of exposure to and
 
20 inhalation of smoke, toxic gases, chemical fumes, and other toxic
 
21 vapors, unless the contrary be shown by competent evidence;
 
22 provided that such firefighter, police officer, or sewer worker
 
23 shall have passed a physical examination on entry into such
 

 
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 1 service or subsequent to such entry, which examination failed to
 
 2 reveal any evidence of such condition."
 
 3      SECTION 4.  Section 88-132.5, Hawaii Revised Statutes, is
 
 4 amended as follows:
 
 5      1.  By amending subsections (a) and (b) to read:
 
 6      "(a)  Any employee who becomes a member of the system in
 
 7 accordance with section 88-42 after June 17, 1996, and has
 
 8 rendered honorable active military service in the armed forces of
 
 9 the United States, may be credited with membership service credit
 
10 for active military service of up to four years or the actual
 
11 number of years of active military service, whichever is less, as
 
12 follows:
 
13      (1)  Any member with ten years of credited service in the
 
14           system may be credited with up to two years of
 
15           membership service credit[;] at the rate of one and
 
16           one-fourth per cent for each year of credited service;
 
17      (2)  Any member with twenty years of credited service in the
 
18           system may be credited with up to three years of
 
19           membership service credit[;] at the rate of one and
 
20           one-fourth per cent for each year of credited service;
 
21           and
 
22      (3)  Any member with twenty-five years of credited service
 
23           in the system may be credited with up to four years of
 

 
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 1           membership service credit[.] at the rate of one and
 
 2           one-fourth per cent for each year of credited service.
 
 3      (b)  Any employee who became a member of the system in
 
 4 accordance with section 88-42 before June 18, 1996, and has
 
 5 rendered honorable active military service in the armed forces of
 
 6 the United States, may be credited with membership service credit
 
 7 for active military service of up to four years or the actual
 
 8 number of years of active military service, whichever is less, as
 
 9 follows:
 
10      (1)  Any member with eight years of credited service in the
 
11           system may be credited with up to two years of
 
12           membership service credit[;] at the rate of one and
 
13           one-fourth per cent for each year of credited service;
 
14      (2)  Any member with twenty years of credited service in the
 
15           system may be credited with up to three years of
 
16           membership service credit[;] at the rate of one and
 
17           one-fourth per cent for each year of credited service;
 
18           and
 
19      (3)  Any member with twenty-five years of credited service
 
20           in the system may be credited with up to four years of
 
21           membership service credit[.] at the rate of one and
 
22           one-fourth per cent for each year of credited service."
 
23      2.  By amending subsection (f) to read:
 

 
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 1      "(f)  [A] Beginning July 1, 2000, for the purposes of
 
 2 calculating a contributory member's active military service
 
 3 credit, the contributory member's base military service credit
 
 4 shall be [considered service in the member's occupation at the
 
 5 time that service is credited and shall be purchased at the rate
 
 6 specified in section 88-45,] calculated in the same manner as the
 
 7 allowance rate provided for noncontributory members under section
 
 8 88-282, per year of credited military service, and the retirement
 
 9 allowance provided by that service shall be calculated as
 
10 provided in section 88-74.
 
11      Beginning July 1, 2000, any contributory member who is
 
12 qualified to obtain the military service credit authorized under
 
13 this section but who, as of July 1, 2000, has not exercised the
 
14 option to purchase the military service credit, shall have the
 
15 option of obtaining the same amount of military service credit
 
16 calculated at the allowance rate provided for noncontributory
 
17 members under section 88-282.  A qualified contributory member
 
18 who exercises the option to obtain the military service credit at
 
19 the noncontributory rate shall not be required to purchase those
 
20 years of creditable service.  However, a contributory member may
 
21 elect to make contributions pursuant to section 88-45 to raise
 
22 the member's base military service credit to a level equal to the
 
23 member's contributory allowance status at the time the military
 

 
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                                     H.B. NO.           H.D. 2
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 1 service is credited.  Any election of an option under this
 
 2 paragraph shall be made within three months of the approval of
 
 3 the application for military service credit by the employees'
 
 4 retirement system and shall be final and irrevocable."
 
 5      SECTION 5.  Section 88-163, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "88-163  Death benefits:  funeral expenses; payments to
 
 8 dependents.(a)  Upon the death of any member of the police
 
 9 force, fire department, or band, as a result of any injury
 
10 received or disease contracted while in the performance of his
 
11 duty, or when entitled to a pension under this part or who has
 
12 been pensioned under this part there shall be paid, for funeral
 
13 expenses, a sum not to exceed $100.  Should the deceased member
 
14 leave a dependent widow or reciprocal beneficiary and a child or
 
15 children under the age of eighteen years, then there shall be
 
16 paid out of the system $50 per month to the widow until her death
 
17 [or remarriage] or to the reciprocal beneficiary until death,
 
18 [marriage, or entry into a new reciprocal beneficiary
 
19 relationship] and $7.50 per month to the widow or reciprocal
 
20 beneficiary for each child so long as the child shall reside with
 
21 the widow or reciprocal beneficiary or is supported by the widow
 
22 or reciprocal beneficiary.  Upon the death of such widow or
 
23 reciprocal beneficiary, or in the event the deceased member
 

 
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 1 leaves no widow or reciprocal beneficiary but a child or children
 
 2 under the age of eighteen years, then there shall be paid out of
 
 3 the system $50 per month to the child or children of the deceased
 
 4 member under the age of eighteen years with each child, if there
 
 5 be more than one, receiving an equal share of the $50 per month
 
 6 payment plus $7.50 per month.  All payments to a child of a
 
 7 deceased member provided for herein shall cease when he or she
 
 8 arrives at the age of eighteen years.
 
 9      (b)  If any member of the police force, fire department, or
 
10 band, dies not leaving a widow or reciprocal beneficiary, but
 
11 leaving a father or mother dependent upon him, the father or
 
12 mother (but not both) shall, upon satisfactory proof of
 
13 dependency being made to the board of trustees receive from the
 
14 system a sum not exceeding $50 per month.  The board shall
 
15 determine whether the father or mother is dependent and how much
 
16 of the amount herein provided for shall be paid to him or her.
 
17 If there be no widow or reciprocal beneficiary and no child and
 
18 no father or mother, but dependent brothers or sisters, then such
 
19 pension shall be paid to them in such sums as shall not exceed
 
20 the aggregate amount of $30 per month.  All pensions authorized
 
21 as provided in this subsection shall be subject to reduction by
 
22 the board of trustees whenever, in its judgment, circumstances
 
23 make it reasonable, fair, or necessary.  All pensions so reduced
 

 
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 1 may thereafter be restored or further reduced as the board may
 
 2 deem best.
 
 3      (c)  [On the remarriage of any widow or reciprocal
 
 4 beneficiary entitled to the benefits of any sum, or in] In the
 
 5 event of any father or mother, brothers or sisters [ceasing]
 
 6 cease to be dependents then the payments to them shall cease."
 
 7      SECTION 5.  Section 88-286, Hawaii Revised Statutes, is
 
 8 amended by amending subsections (b) and (c) to read as follows:
 
 9      "(b)  In the case of ordinary death, the death benefit shall
 
10 be as follows:
 
11      (1)  For the surviving spouse or reciprocal beneficiary, an
 
12           allowance equal to one-half of the member's accrued
 
13           normal retirement allowance unreduced for age, payable
 
14           [until remarriage, marriage, or entry into a new
 
15           reciprocal beneficiary relationship[,]] as if the
 
16           member had retired the day prior to death; and for each
 
17           dependent child an allowance equal to ten per cent of
 
18           the member's accrued normal retirement allowance
 
19           unreduced for age, payable until the dependent child
 
20           attains age eighteen; provided that the aggregate death
 
21           benefits for all the dependent children shall not
 
22           exceed twenty per cent of the member's accrued normal
 
23           retirement allowance unreduced for age; or
 

 
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 1      (2)  For the surviving spouse [[]or reciprocal
 
 2           beneficiary[]], if the member was eligible for
 
 3           retirement at the time of death in service, and death
 
 4           occurred after June 30, 1990, an allowance that would
 
 5           have been payable as if the member had retired the day
 
 6           prior to death and had elected to receive a retirement
 
 7           allowance under option B of section 88-283; and
 
 8      (3)  If there is no surviving spouse or reciprocal
 
 9           beneficiary, each dependent child shall receive an
 
10           allowance equal to twenty per cent of the member's
 
11           accrued normal retirement allowance unreduced for age,
 
12           payable until the dependent child attains age eighteen;
 
13           provided that the aggregate death benefits for all the
 
14           dependent children shall not exceed forty per cent of
 
15           the member's accrued normal retirement allowance
 
16           unreduced for age.
 
17      For the purpose of determining eligibility for the ordinary
 
18 death benefit, a year round school employee shall be considered
 
19 in service during the July and August preceding a transfer to a
 
20 traditional school schedule if the employee was in service for
 
21 the entire prior school year and has a contract for the upcoming
 
22 traditional school year.
 
23      (c)  In the case of accidental death, the death benefit
 

 
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 1 shall be as follows:
 
 2      (1)  For the surviving spouse[,] or reciprocal beneficiary,
 
 3           an allowance equal to thirty per cent of the member's
 
 4           average final compensation, payable until [remarriage;]
 
 5           the death of the surviving spouse or reciprocal
 
 6           beneficiary;
 
 7      (2)  If there is a surviving spouse or reciprocal
 
 8           beneficiary, each dependent child under eighteen shall
 
 9           receive an allowance equal to the greater of:
 
10           (A)  Ten per cent of the member's accrued normal
 
11                retirement allowance, unreduced for age; provided
 
12                that the aggregate death benefits for all the
 
13                dependent children shall not exceed twenty per
 
14                cent of the member's accrued normal retirement
 
15                allowance unreduced for age; or
 
16           (B)  Three per cent of the member's average final
 
17                compensation; provided that the aggregate death
 
18                benefits for all the dependent children shall not
 
19                exceed six per cent of the member's average final
 
20                compensation.
 
21           The death benefit under this paragraph shall be payable
 
22           to each dependent child until the dependent child
 
23           attains age eighteen; and
 

 
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 1      (3)  If there is no surviving spouse or reciprocal
 
 2           beneficiary, each dependent child under eighteen shall
 
 3           receive an allowance equal to the greater of:
 
 4           (A)  Twenty per cent of the member's accrued normal
 
 5                retirement allowance, unreduced for age; provided
 
 6                that the aggregate death benefits for all the
 
 7                dependent children shall not exceed forty per cent
 
 8                of the member's accrued normal retirement
 
 9                allowance unreduced for age; or
 
10           (B)  Six per cent of the member's average final
 
11                compensation; provided that the aggregate death
 
12                benefits for all the dependent children shall not
 
13                exceed twelve per cent of the member's average
 
14                final compensation.
 
15           The death benefit under this paragraph shall be payable
 
16           to each dependent child until the dependent child
 
17           attains age eighteen."
 
18      SECTION 6.  Notwithstanding any law to the contrary, members
 
19 who, prior to July 1, 2000, have made lump sum payments or
 
20 additional deductions from their compensation to obtain
 
21 membership service credit for active military service and who
 
22 elect to receive a military service credit at the base military
 
23 service credit rate pursuant to section 88-132.5(f), Hawaii
 

 
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 1 Revised Statutes, may receive a refund for all member payments
 
 2 and deductions made up to the amount credited under section 88-
 
 3 132.5, Hawaii Revised Statutes.
 
 4      SECTION 7.  There is appropriated out of the employees'
 
 5 retirement system of the State of Hawaii the sum of $          or
 
 6 so much thereof as may be necessary for fiscal year 2000-2001 to
 
 7 fund the refunds authorized in section 6 of this Act.
 
 8      The sum appropriated shall be expended by the employees'
 
 9 retirement system for the purposes of this Act.
 
10      SECTION 8.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 9.  This Act shall take effect on July 1, 2005;
 
13 provided that section 4 shall be effective retroactive to July 1,
 
14 1989.