Report Title:

Pensioner bonus; employers' worker retention special fund

Description:

Provides special compensation to pensioners; establishes employers' worker retention special fund. (HB2805 HD1)

 

 

HOUSE OF REPRESENTATIVES

H.B. NO.

2805

TWENTY-FIRST LEGISLATURE, 2002

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to government.

 

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

SECTION 1. The legislature finds that there is a need to:

(1) Assist retirees living on fixed incomes to cope with the rising costs of living in Hawaii;

(2) Provide retirement with dignity for pensioners; and

(3) Honor the 7.5 per cent contributions made into the employees' retirement system since its inception by current retirees, which has helped to create the $9,200,000,000 in assets in the system as of June 30, 2000.

The legislature further finds that employers are also faced with economic hardships, especially in the aftermath of the terrorist attacks of September 11, 2001, and that these hardships place a severe strain on the economic viability of the employer. If it becomes too difficult for an employer to bear this burden, an employer is often faced with the possibility of closing their operations and placing large numbers of individuals on the unemployment rolls. To avoid such a situation, many employers choose to lay off employees in an attempt to cut back on their expenses. However, this results in loss of employment for some individuals as they are forced to reapply for jobs that they once held with the possibility that they will not be asked to return to work for the new employer.

The legislature does not find this to be a winning proposition for any of the parties involved. Employers lose capable and valuable employees, the employees lose jobs they may have held for decades, and the State loses tax revenue and moneys from the payout of unemployment claims.

The purpose of part I of this Act is to provide special compensation each month to state and county retirees who are seventy years of age and older with at least twenty years of credited service, with compensation adjustments made every five years.

The special compensation is to be calculated by multiplying $1.25 per month by the number of years in service for those aged seventy, rising incrementally every five years with a progressively larger special compensation for those retired the longest.

Part II of this Act attempts to alleviate some of the economic hardships for employers by providing a means for employers to obtain funds to assist their needs in return for worker retention.

PART I

SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§88- Pensioners' special compensation. (a) Any other provision to the contrary notwithstanding, effective July 1, 2002, and each July 1, thereafter, special compensation shall be paid to retirants and pensioners aged seventy and older with twenty or more years of service or to their beneficiaries who are receiving a monthly benefit from the system, in accordance with this section; provided that:

(1) The requirement of twenty or more years of service shall not apply in the case of a person who retires with less than twenty years of service because of a service connected disability; and

(2) If the retirant or pensioner is currently receiving larger special compensation amounts than what would be payable under this section, the retirant or pensioner shall continue to receive the special compensation amount received on June 30, 2002, until the retirant’s or pensioner’s special compensation calculated under this section exceeds the June 30, 2002, special compensation amount, at which time the difference between the June 30, 2002, special compensation and the special compensation calculated under this section would be payable.

(b) The special compensation amounts payable under this section shall be based upon years of retirement and shall be a cumulative amount to include all previous bonuses or special compensation, however characterized, and shall not exceed:

(1) $1.25 a month for each year of the retirant’s or pensioner’s credited service if the retirant or pensioner has been retired a minimum of five years by July 1 in the year in which the special compensation is effective;

(2) $2.50 a month for each year of the retirant’s or pensioner’s credited service if the retirant or pensioner has been retired a minimum of ten years by July 1 in the year in which the special compensation is effective;

(3) $4.50 a month for each year of the retirant’s or pensioner’s credited service if the retirant or pensioner has been retired a minimum of fifteen years by July 1 in the year in which the special compensation is effective;

(4) $6.00 a month for each year of the retirant’s or pensioner’s credited service if the retirant or pensioner has been retired a minimum of twenty years by July 1 in the year in which the special compensation is effective;

(5) $8.75 a month for each year of the retirant’s or pensioner’s credited service if the retirant or pensioner has been retired a minimum of twenty-five years by July 1 in the year in which the special compensation is effective;

(6) $10.50 a month for each year of the retirant’s or pensioner’s credited service if the retirant or pensioner has been retired a minimum of thirty years by July 1 in the year in which the special compensation is effective; and

(7) Any other provision to the contrary notwithstanding, any retirant or pensioner with ten or more years of service who on July 1 of the year in which the special compensation is being calculated has been retired a minimum of twenty years and whose current special compensation amount exceeds the maximum specified in this section, shall nevertheless receive a pension increase of $1.25 a month for each year of credited service;

provided that if the retirant or pensioner had retired, returned to service, and again retired, the person's latest retirement date shall be considered as the date of retirement."

PART II

SECTION 3. Chapter 371, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§371- Employers' worker retention special fund; established. (a) There is established the employers' worker retention special fund to be placed administratively within the department of labor and industrial relations to provide assistance to employers facing economic hardships. Employers who are able to establish financial hardship, as determined by the director of labor and industrial relations, shall be eligible to receive funds in exchange for retention of employees.

(b) The employers' worker retention special fund shall consist of appropriations from the legislature and grants from any other source.

(c) Any employer who experiences a loss of revenues of

per cent or more and who retains their entire workforce shall be eligible to receive moneys from the employers' worker retention special fund, as determined by the director. The director shall provide compensation to employers experiencing economic hardships who retain their employees by providing

$         of compensation per month per employee retained."

SECTION 4. The director of finance is authorized to transfer $ from the premium supplementation fund, created pursuant to section 393-41, Hawaii Revised Statutes, to be deposited into the employers' worker retention special fund for the purposes of this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2002; provided that:

(1) On July 1,     , section 2 of this Act shall be repealed; and

(2) The repeal of section 2 shall not affect entitlement to benefits accruing to any retirant, pensioner, or beneficiary pursuant to this Act prior to July 1,     .