STAND. COM. REP. NO. 2275

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2787
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 2787 entitled: 

     "A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT
     SYSTEM,"

begs leave to report as follows:

     The purpose of this measure is to simplify and facilitate
the administration and processing of pension benefits.

     Specifically, the measure:

     (1)  Amends the service-connected accidental death benefit
          filing procedure by placing a two-year time limit for
          claimants to file for such benefits; and

     (2)  Allows the Employees' Retirement System to exclude
          interest on deficiency payments made by contributory
          plan members.

     The Employees' Retirement System submitted comments on the
measure which stated that if enacted, the measure would not
result in a significant increase in employer contributions.

     Your Committee finds that placing a two-year time limit to
file for service-related accidental death benefits is consistent
with the time limit imposed on service-connected disability
retirement benefit filings.


 
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     Your Committee also finds that with regard to deficiency
payments, a deficiency occurs when a contributory member's
retirement contribution fails to equal the full amount required
by law.  Under existing law, interest is calculated and assessed
against the deficient amount that the member must pay in order to
obtain full retirement benefit credit.  Since the existence of
the deficiency is usually not the member's fault, your Committee
believes that it is unfair to require the member to pay the
interest.

     Your Committee has amended the measure by making technical,
nonsubstantive amendments to conform the measure to recommended
drafting procedures.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 2787, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 2787, S.D. 1, and be referred to the Committee on Ways and
Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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