Report Title:

Employees' Retirement System; Service Retirement

 

Description:

Increases, for new public employees, the minimum age and length of service for an unreduced service retirement allowance.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1715

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO RETIREMENT.

 

 

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

 


     SECTION 1.  The purpose of this Act is to address retirement benefits for public employees.  More specifically, this Act increases the minimum age and length of service for receipt of an unreduced service retirement allowance by a public employee who first entered state or county service after June 30, 2009.

     The legislature finds that the increase of the age and length of service provisions in this Act are not intended to apply to a public employee who first entered state or county service before June 30, 2009, subsequently left service, and re-entered service after June 30, 2009.

     SECTION 2.  Section 88-21, Hawaii Revised Statutes, is amended by adding a new definition of "minimum full service retirement age" to be appropriately inserted and to read as follows:

     ""Minimum full service retirement age" means the minimum age established by this chapter at which a member may retire from service and receive a service retirement allowance unreduced for age."

     SECTION 3.  Section 88-73, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(a)  The service retirement provisions applicable to a class A or B member shall depend upon the date the member first enters service.

     (1)  This paragraph shall apply to a class A or B member who first entered service before July 1, 2009, including a member who has first entered service before that date, subsequently left service, and re-entered service after June 30, 2009.  Any member subject to this paragraph who has at least five years of credited service and who has attained age fifty-five or any member who has at least twenty-five years of credited service or any member who has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer, shall become eligible to receive a retirement allowance after the member has terminated service.

     (2)  This paragraph shall apply to a class A or B member who first entered service after June 30, 2009.  Any member subject to this paragraph who has at least ten years of credited service and who has attained age sixty-five or any member who has at least thirty years of credited service or any member who has at least fifteen years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer, shall become eligible to receive a retirement allowance after the member has terminated service.

    (b)   Any member who first earned credited service as a judge [after]:

     (1)  After June 30, 1999, but before July 1, 2009, and who has at least five years of credited service and has attained age fifty-five or has at least twenty-five years of credited service shall become eligible to receive a retirement allowance after the member has terminated service.

     (2)  After June 30, 2009, and who has at least ten years of credited service and has attained age sixty-five or has at least thirty years of credited service shall become eligible to receive a retirement allowance after the member has terminated service."

     SECTION 4.  Section 88-74, Hawaii Revised Statutes, is amended to read as follows:

     "§88-74  Allowance on service retirement.  (a)  Upon retirement from service, a member shall receive a maximum retirement allowance as follows:

     (1)  If the member has attained the minimum full service retirement age [fifty-five], a retirement allowance of two per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of two per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that:

         (A)  After June 30, 1968, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney;

         (B)  After June 30, 1977, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer;

         (C)  After June 16, 1981, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general;

         (D)  After June 30, 1989, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator;

         (E)  After December 31, 1993, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a water safety officer;

         (F)  After June 30, 1994, if the member has at least ten years of credited service, of which the last five or more years prior to retirement are credited service as a public safety investigations staff investigator;

         (G)  After June 30, 2002, if the member:

              (i)  Has at least ten years of credited service as a firefighter;

             (ii)  Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and

            (iii)  Continues employment in a class A or B position other than a firefighter; and

         (H)  After June 30, 2004, if the member:

              (i)  Has at least ten years of credited service as a police officer;

             (ii)  Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and

            (iii)  Continues employment in a class A or B position other than a police officer;

          then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, water safety officer, or public safety investigations staff investigator, the retirement allowance shall be two and one-half per cent of the member's average final compensation.  The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation.  If the member has not attained the minimum full service retirement age [fifty-five], the member's retirement allowance shall be computed as though the member had attained that age [fifty-five], reduced for age as provided in subsection (b);

     (2)  If the member has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

         (A)  For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service; and

         (B)  For a member who first earned credited service as a judge after June 30, 1999, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  If the member has not attained the minimum full service retirement age [fifty-five], the member's retirement allowance shall be computed as though the member had attained that age [fifty-five], reduced for age as provided in subsection (b); or

         (C)  For a judge with other credited service, as provided in paragraph (1).  If the member has not attained the minimum full service retirement age [fifty-five], the member's retirement allowance shall be computed as though the member had attained that age [fifty-five], reduced for age as provided in subsection (b); or

         (D)  For a judge with credited service as an elective officer or as a legislative officer, as provided in paragraph (3).

          No allowance shall exceed seventy-five per cent of the member's average final compensation.  If the allowance exceeds this limit, it shall be adjusted by reducing the annuity included in subparagraphs (A) and (B) and the portion of the accumulated contributions specified in the subparagraphs in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  The allowance for judges under this paragraph, together with the retirement allowance provided by the federal government for similar service, shall in no case exceed seventy-five per cent of the member's average final compensation; or

     (3)  If the member has credited service as an elective officer or as a legislative officer, the member's retirement allowance shall be derived by adding the allowances computed separately under subparagraphs (A), (B), (C), and (D) as follows:

         (A)  Irrespective of age, for each year of credited service as an elective officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service; and

         (B)  Irrespective of age, for each year of credited service as a legislative officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

         (C)  If the member has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

              (i)  For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service; and

             (ii)  For a member who first earned credited service as a judge after June 30, 1999, and has attained the minimum full service retirement age [of fifty-five], for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  If the member has not attained the minimum full service retirement age [fifty-five], the member's retirement allowance shall be computed as though the member had attained that age [fifty-five], reduced for age as provided in subsection (b); and

         (D)  For each year of credited service not included in subparagraph (A), (B), or (C), the average final compensation as computed under section 88-81(e)(4) shall be multiplied by two per cent for credited service earned as a class A or class H member, two and one-half per cent for credited service earned as a class B member, and one and one-quarter per cent for credited service earned as a class C member.  If the member has not attained the minimum full service retirement age [fifty-five], the member's retirement allowance shall be computed as though the member had attained that age [fifty-five], reduced for age as provided in subsection (b).

          The total retirement allowance shall not exceed seventy-five per cent of the member's highest average final compensation calculated under section 88-81(e)(1), (2), (3), or (4).  If the allowance exceeds this limit, it shall be adjusted by reducing any annuity accrued under subparagraphs (A), (B), and (C) and the portion of the accumulated contributions specified in these subparagraphs in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  If a member has service credit as an elective officer or as a legislative officer in addition to service credit as a judge, then the retirement benefit calculation contained in this paragraph shall supersede the formula contained in paragraph (2).

     (b)  Except as provided in subsection (a)[,] or (c), if a member has not attained the minimum full service retirement age [fifty-five] at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below that age [fifty-five], as follows:

     (1)  For a member who first entered service before July 1, 2009:

    [(1)] (A)  0.4166 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus

    [(2)] (B)  0.3333 per cent for each month below age fifty and above age forty-four and eleven months; plus

    [(3)] (C)  0.2500 per cent for each month below age forty-five and above age thirty-nine and eleven months; plus

    [(4)] (D)  0.1666 per cent for each month below age forty; and

     (2)  For a member who first entered service after June 30, 2009:

          (A)  0.4166 per cent for each month below age sixty-five and above age fifty-nine and eleven months; plus

          (B)  0.3333 per cent for each month below age sixty and above age fifty-four and eleven months; plus

          (C)  0.2500 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus

          (D)  0.1666 per cent for each month below age fifty[;

provided that no].

     (c)  No reduction of service retirement allowance shall be made [if the] for the following:

     (1)  A member who first entered service before July 1, 2009, and has at least twenty-five years of credited service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, or water safety officer, of which the last five or more years prior to retirement is credited service in these  capacities[.]; or

     (2)  A member who first entered service after June 30, 2009, and has at least thirty years of credited service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, or water safety officer, of which the last ten or more years prior to retirement is credited service in these capacities."

     SECTION 5.  Section 88-331, Hawaii Revised Statutes, is amended by amending the title and subsections (a), (b), (c), and (d) to read as follows:

     [[]§88-331[]]  Service retirement.  (a)  The service retirement provisions applicable to a class H member shall depend upon the date the member first entered service.

     (1)  This paragraph shall apply to a member who first entered service before July 1, 2009, including a member who first entered service before that date, subsequently left service, and re-entered service after June 30, 2009.  A class H member who has five years of credited service and has attained age sixty-two, or a class H member with thirty years credited service who has attained the age of fifty-five shall become eligible to receive a retirement allowance after the member has terminated service.

     (2)  This paragraph shall apply to a member who first entered service after June 30, 2009.  A class H member subject to this paragraph who has ten years of credited service and has attained age sixty-seven, or a class H member with thirty-five years credited service who has attained the age of sixty shall become eligible to receive a retirement allowance after the member has terminated service.

(b)  (1)  This paragraph shall apply to a class H member who first entered service before July 1, 2009, including a member who first entered service before that date, subsequently left service, and re-entered service after June 30, 2009.  A class H member subject to this paragraph who has at least twenty-five years of credited service as a sewer worker or water safety officer, of which the last five or more years prior to retirement is credited service in that capacity, shall become eligible to receive a retirement allowance unreduced for age after the member has terminated service.

     (2)  This paragraph shall apply to a class H member who first entered service after June 30, 2009.  A class H member subject to this paragraph who has at least thirty years of credited service as a sewer worker or water safety officer, of which the last ten or more years prior to retirement is credited service in that capacity, shall become eligible to receive a retirement allowance unreduced for age after the member has terminated service.

    (c)   (1)  This paragraph shall apply to a member who first entered service before July 1, 2009, including a member who first entered service before that date, subsequently left service, and re-entered service after June 30, 2009.  A class H member subject to this paragraph who has twenty years of credited service and has attained age fifty-five shall be eligible to receive an early retirement allowance reduced for age after the member has terminated service.

     (2)  This paragraph shall apply to a member who first entered service after June 30, 2009.  A class H member subject to this paragraph who has twenty-five years of credited service and has attained age sixty shall be eligible to receive an early retirement allowance reduced for age after the member has terminated service.

     (d)  If a class H member who first entered service before July 1, 2009, and has at least twenty-eight years of credited service on or after July 1, 2005; twenty-seven years of credited service on or after July 1, 2006; twenty-six years of credited service on or after July 1, 2007; and twenty-five years of credited service on or after July 1, 2008, as an emergency medical technician, of which the last five or more years prior to retirement is credited service in that capacity, the member shall be eligible to receive a retirement benefit unreduced for age after the member has terminated service.

     If a class H member who first entered service after June 30, 2009, and has at least thirty-three years of credited service on or after July 1, 2005; thirty-two years of credited service on or after July 1, 2006; thirty-one years of credited service on or after July 1, 2007; and thirty years of credited service on or after July 1, 2008, as an emergency medical technician, of which the last ten or more years prior to retirement is credited service in that capacity, the member shall be eligible to receive a retirement benefit unreduced for age after the member has terminated service."

     SECTION 6.  Section 88-332, Hawaii Revised Statutes, is amended to read as follows:

     "§88-332  Service retirement allowance.  Upon retirement from service, a class H member shall receive a maximum retirement allowance as follows:

     (1)  If the member has met the requirements in section 88-331(a), (b), or (d), a maximum retirement allowance of two per cent of the average final compensation multiplied by the number of years of class H credited service, plus a retirement allowance at the rate of one and one-fourth per cent of the member's average final compensation multiplied by the number of years of class C credited service; or

     (2)  If the member has met the requirements in section 88-331(c), an early retirement allowance equal to the maximum retirement allowance calculated as provided in paragraph (1), reduced by 0.4166 per cent for each month the member is less than the minimum full service retirement age [sixty-two] at retirement."

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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