REPORT TITLE:
Employees' Retirement System


DESCRIPTION:
Allows qualifying ERS members, whether noncontributory or
contributory, to acquire military service credit at no cost.
Allows qualifying ERS members to purchase additional service
credits.  Provides for refund to members who have already bought
back military service time.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.564        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM. 


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

 1      SECTION 1.  Section 88-132.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§88-132.5  Credit for military service.(a)  Any employee
 
 4 who becomes a member of the system in accordance with section 88-
 
 5 42 after June 17, 1996, and has rendered honorable active
 
 6 military service in the armed forces of the United States, may be
 
 7 credited with membership service credit for active military
 
 8 service of up to four years or the actual number of years of
 
 9 active military service, whichever is less, as follows:
 
10      (1)  Any member with ten years of credited service in the
 
11           system may be credited with up to two years of
 
12           membership service credit[;] at the rate of one and
 
13           one-fourth per cent;
 
14      (2)  Any member with twenty years of credited service in the
 
15           system may be credited with up to three years of
 
16           membership service credit[;] at the rate of one and
 
17           one-fourth per cent; and
 
18      (3)  Any member with twenty-five years of credited service
 
19           in the system may be credited with up to four years of
 
20           membership service credit[.] at the rate of one and
 
21           one-fourth per cent.
 

 
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 1      (b)  Any employee who became a member of the system in
 
 2 accordance with section 88-42 before June 18, 1996, and has
 
 3 rendered honorable active military service in the armed forces of
 
 4 the United States, may be credited with membership service credit
 
 5 for active military service of up to four years or the actual
 
 6 number of years of active military service, whichever is less, as
 
 7 follows:
 
 8      (1)  Any member with eight years of credited service in the
 
 9           system may be credited with up to two years of
 
10           membership service credit[;] at the rate of one and
 
11           one-fourth per cent;
 
12      (2)  Any member with twenty years of credited service in the
 
13           system may be credited with up to three years of
 
14           membership service credit[;] at the rate of one and
 
15           one-fourth per cent; and
 
16      (3)  Any member with twenty-five years of credited service
 
17           in the system may be credited with up to four years of
 
18           membership service credit[.] at the rate of one and
 
19           one-fourth per cent.
 
20      (c)  For the purposes of subsections (a) and (b), the latest
 
21 membership date shall be used if there is a change in membership
 
22 date due to termination and re-entry into the system.
 

 
 
 
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 1      (d)  Any retirant who returns to employment, is reenrolled
 
 2 as a member of the system, and has at least three years of
 
 3 credited service in the system during the period of reemployment
 
 4 may be credited with membership service credit for active
 
 5 military service as provided in subsection (a) or (b); provided
 
 6 that membership service credit shall be based upon the member's
 
 7 total service.
 
 8      (e)  Active military service in the military reserve or
 
 9 national guard is not considered active military service unless
 
10 in time of war or declared national or state emergency.
 
11 Membership service creditable under this section shall be
 
12 credited in accordance with sections 88-59 and 88-272.
 
13      (f)  [A contributory member's active military service shall
 
14 be considered service in the member's occupation at the time that
 
15 service is credited and shall be purchased at the rate specified
 
16 in section 88-45, and the retirement allowance provided by that
 
17 service shall be calculated as provided in section 88-74.]
 
18 Members may purchase additional membership service credit at the
 
19 following rates:
 
20      (1)  One and one-fourth per cent per year for Class A
 
21           members;
 
22      (2)  Two and one-fourth per cent per year for Class B
 
23           members; and
 
24      (3)  Three-fourths per cent per year for Class C members.
 
25      (g)  Any violation of this section shall result in the
 

 
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 1 forfeiture of the amount of the purchase of membership service
 
 2 and loss of benefits and membership service credit for military
 
 3 service." 
 
 4      SECTION 2.  Notwithstanding any law to the contrary, members
 
 5 who have made lump sum payments or additional deductions from
 
 6 their compensation to obtain membership service credit for active
 
 7 military service shall receive a refund for all payments and
 
 8 deductions made up to the amount credited under section 88-132.5,
 
 9 Hawaii Revised Statutes.
 
10      SECTION 3.  There is appropriated out of the general
 
11 revenues of the State of Hawaii the sum of $          or so much
 
12 thereof as necessary for fiscal year 1999-2000 to fund the
 
13 refunds authorized in section 2 of this Act.
 
14      SECTION 4.  The sum appropriated shall be expended by the
 
15 employees' retirement system for the purposes of this Act.
 
16      SECTION 5.  Statutory material to be repealed is bracketed.
 
17 New statutory material is underscored.
 
18      SECTION 6.  This Act, upon its approval, shall be effective
 
19 retroactive to July 1, 1989.
 
20 
 
21                           INTRODUCED BY:  _______________________