§88-122 Determination of employer normal cost and accrued liability contributions. (a) Based on regular interest and such mortality and other tables as are adopted by the board of trustees, the actuary engaged by the board, on the basis of successive annual actuarial valuations, shall determine the employer's normal cost and accrued liability contributions for each fiscal year beginning July 1 separately for the following two groups of employees:

(b) The actuarial valuations made for years ending June 30, 1996, to June 30, 2000, shall be based on an eight per cent investment yield rate, a variable salary growth assumption rate, and tables and factors adopted by the board or legislature for actuarial valuations of the system, subject to recommendations made by the actuary appointed under section 88-30. The salary growth assumption used in each annual actuarial valuation shall be determined separately for each of the following groups:

For paragraphs (1), (2), and (3), the salary growth assumption shall be the arithmetic average of the compensation increases experienced by continuing active members, as measured in the data received for the valuation being performed and the two immediately preceding valuations.

(c) With respect to each of the two groups of employees in subsection (a), the normal cost for each year after June 30, 1994, shall be the percentage of the aggregate annual compensation of employees as of March 31 of the valuation year as determined by the actuary using the entry age normal cost funding method. On each June 30 the board shall determine the allocation of the assets of the pension accumulation fund between the two groups of employees in subsection (a); provided that the assets of the pension accumulation fund as of June 30, 1976, shall be allocated between the two groups in the same proportion as the aggregate annual compensation of each group as of March 31, 1976.

(d) Commencing with the 1995 fiscal year and each subsequent fiscal year, the actuary shall determine the total unfunded accrued liability using the entry age normal cost funding method separately for each of the two groups of employees in subsection (a). The accrued liability contribution for each of the two groups of employees shall be the annual payment required to liquidate the unfunded accrued liability over a period of twenty-one years beginning July 1, 1995. Any increase or decrease in the total unfunded accrued liability resulting from legislative changes in the benefit provisions of the employees' retirement system shall be liquidated over a period of time to be determined by the actuary. [L 1925, c 55, pt of §8; am imp L 1927, c 251, §4; am L 1933, c 181, §3; am L Sp 1933, c 10, §§2, 3; RL 1935, pt of §7927; am L 1935, c 48, §§2, 4; RL 1945, pt of §712, subs 3; RL 1955, §6-89; am L 1964, c 62, §12; am L 1965, c 222, §15; HRS §88-113; am L 1969, c 110, pt of §1; am L 1973, c 19, §1; am L 1977, c 171, §2 and c 191, §2; am L 1981, c 201, §1; am L 1982, c 147, §6; am L 1983, c 190, §1; am L 1985, c 128, §1; gen ch 1985; am L 1987, c 291, §1; am L 1988, c 41, §7; am L 1989, c 184, §1; am L 1991, c 170, §1; am L 1993, c 144, §1; am L 1994, c 276, §9; am L 1996, c 79, §1; am L 1997, c 327, §3; am L 1998, c 151, §1]