§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:

     (1)  Police officers, firefighters, and corrections officers; and

     (2)  All other employees.

     (b)  The actuarial valuations made for years after June 30, 1999, shall be based on an eight per cent investment yield rate, assumed salary increases of four per cent, and tables, contribution rates, and factors adopted by the board or legislature for actuarial valuations of the system, subject to recommendations made by the actuary appointed under section 88-29.

     (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 fiscal year 1994-1995 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-nine years beginning July 1, 2000.  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.

     (e)  Commencing with fiscal year 2005-2006 and each subsequent fiscal year, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on fifteen and three-fourths per cent of the member's compensation for police officers, firefighters, and corrections officers and thirteen and three-fourths per cent of the member's compensation for all other employees.  The contribution rates shall amortize the total unfunded accrued liability of the entire plan over a period not to exceed thirty years.  The contribution rates shall be subject to adjustment:

     (1)  If the actual period required to amortize the unfunded accrued liability exceeds thirty years;

     (2)  If the actual period required to amortize the unfunded accrued liability falls below the established benchmark funding period of twenty-five years; or

     (3)  Based on the actuarial investigation conducted in accordance with section 88-105. [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; am L 2001, c 104, §1; am L 2002, c 147, §2; am L 2004, c 181, §2]

 

Note

 

  L 2004, c 181, §8 provides:

  "SECTION 8.  Act 212, Session Laws of Hawaii 1994, as amended by Act 216, Session Laws of Hawaii 2000, is amended by amending section 4 to read as follows:

  "SECTION 4.  The board of trustees of the employees' retirement system shall make payments with respect to all eligible employees who retire pursuant to this Act.

  The board shall determine:

  (1) The amount equal to the actuarial present value of the difference between the allowances members receive after the receipt of service credit under this Act and the allowances members would have received without the two years of additional service credit; and

  (2) The portion of the additional actuarial present value of benefits to be charged to the State and to each county, based on retirements during the early retirement incentive bonus period.

The State and counties shall make separate additional payments to the employees' retirement system in the amounts required to liquidate the additional actuarial present value of benefits over a period of five years beginning July 1, 1997; provided that the State's and counties' separate payments under this Act shall be recalculated so as to liquidate the outstanding balance of each employer's additional actuarial present value of benefits as of June 30, 1997, over the period of time specified in section 88-122(d), Hawaii Revised Statutes; provided further that the State's and counties' payments under this Act remaining as of June 30, 2005, shall be included in employer contributions for normal cost and accrued liability as specified in section 88-122(e), Hawaii Revised Statutes."