CONFERENCE COMMITTEE REP. NO. 120-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 2873

S.D. 1

H.D. 2

C.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 2873, S.D. 1, H.D. 2, entitled:

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

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this measure is to amend the method for determining the employer's contribution amount to the Employees' Retirement System commencing in fiscal year 2005-2006 as follows:

(1) 15.75 percent of a member's compensation for police and firefighters; and

(2) 13.75 percent of a member's compensation for all other employees.

This measure also eliminates the separate computation of contributions for the Early Incentive Retirement Plan authorized under Act 212, Session Laws of Hawaii 1994.

Your Committee on Conference finds that employer contributions to the Employees' Retirement System are currently calculated based upon annual actuarial valuations that are determined in dollar amounts which account for normal cost and amounts required to amortize the projected unfunded liability within a statutorily established period of time. Your Committee on Conference determines that funding requirements can fluctuate significantly from year to year and, therefore, a more stable methodology for calculating the employer's contribution amount would be more beneficial. Establishing the employer's contribution to the Employees' Retirement System as a percentage amount will facilitate more predictable budget requirements and cash flow, curb increases in employer contributions as a result of short-term adverse conditions, and provide employees with added security benefits.

Additionally, the elimination of a separate computation for the Early Incentive Retirement Plan contributions will also streamline the administration of the Early Incentive Retirement Plan without materially affecting the amount of the contributions.

Upon further consideration, your Committee on Conference has amended this measure by making its provisions effective on July 1, 2005, rather than on July 1, 2010.

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 2873, S.D. 1, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 2873, S.D. 1, H.D. 2, C.D. 1.

 

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________

MARCUS R. OSHIRO, Co-Chair

____________________________

BRIAN KANNO, Co-Chair

____________________________

DWIGHT Y. TAKAMINE, Co-Chair

____________________________

BRIAN T. TANIGUCHI, Co-Chair