STAND. COM. REP. NO.  469

 

Honolulu, Hawaii

                , 2011

 

RE:   H.B. No. 1038

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

 

Sir:

 

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 1038 entitled:

 

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

 

begs leave to report as follows:

 

     The purpose of this bill is to provide retirement benefits for State and county employees who become members of the Employees' Retirement System (ERS) of the State of Hawaii after June 30, 2012, that are different from the retirement benefits of current employees.  Changes for employees who become members of ERS after June 30, 2012, include raising the employee contribution rates, increasing the period for calculating average final compensation from three years to five years, and increasing the vesting period from five to ten years.

 

     The ERS Board of Trustees supported this bill.  The Department of Budget and Finance supported the intent of the measure.  The City and County of Honolulu and the Hawaii Fire Fighters Association provided comments.  The University of Hawaii Professional Assembly opposed this bill.

 

     If the public employee retirement benefit structure is not changed:

 

     (1)  The financial soundness of the retirement system will be threatened;


     (2)  Public employer costs will become increasingly burdensome to the employers and ultimately to the taxpayers; and

 

     (3)  Vital government programs may be jeopardized because of the need to use operational funds to pay for employee benefits.

 

     Technical, nonsubstantive amendments have been made for clarity, consistency, and style.

 

     As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1038, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1038, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

 

 

 

 

____________________________

KARL RHOADS, Chair