REPORT TITLE:
Employees' Retirement System


DESCRIPTION:
Allows qualified members of the Employees' Retirement System
(ERS) to purchase their military service credit.  Allows a
surviving spouse of a member of the ERS to remarry and still
receive retirement benefits arising from their former spouse's
employment.  (SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        564
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                S.D. 2
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   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.  Chapter 88, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§88-    Reinstatement of benefits.  A surviving spouse or
 
 5 reciprocal beneficiary whose benefits under this chapter arose
 
 6 from the spouse's or reciprocal beneficiary's membership with the
 
 7 employees' retirement system, and whose pension or benefit was
 
 8 terminated by reason of remarriage or entry into a reciprocal
 
 9 beneficiary relationship occurring subsequent to the death of the
 
10 member, may apply for reinstatement of the terminated pension or
 
11 benefit.  The level of reinstated pension or benefit payments
 
12 shall be the amount received by the surviving spouse or
 
13 reciprocal beneficiary on the date that the payment was
 
14 terminated, adjusted to reflect ad hoc and scheduled increases
 
15 from the date of termination to the date of reinstatement."
 
16      SECTION 2.  Section 88-1, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "§88-1 Restrictions.  The provisions of this section shall
 
19 be applicable to every pension and to every recipient or
 

 
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 1 beneficiary thereof, granted or provided for by any special act
 
 2 of the legislature (other than benefits, or the recipients
 
 3 thereof, payable to beneficiaries or retirants of the employees'
 
 4 retirement system under [part II)] parts II and VII) whether the
 
 5 pension be payable by the State or by any county, or by any
 
 6 board, commission, bureau, department, or other agency thereof:
 
 7      (1)  No recipient or beneficiary shall be permitted to draw
 
 8           any pension, or any portion thereof, in excess of $50
 
 9           per month, while the recipient or beneficiary is
 
10           holding any salaried position or office in, under, or
 
11           by authority of the United States, the State, or any
 
12           political subdivision thereof.  This paragraph shall
 
13           not apply to any recipient or beneficiary who is
 
14           elected to the legislature or to the council of any
 
15           county[.];
 
16      (2)  If the recipient or beneficiary is a surviving spouse
 
17           or reciprocal beneficiary, the pension so granted shall
 
18           [cease when the surviving spouse or reciprocal
 
19           beneficiary remarries, marries, or enters into a new
 
20           reciprocal beneficiary relationship.] continue;
 
21           provided that the surviving spouse or reciprocal
 
22           beneficiary makes the election to continue to receive
 

 
 
 
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 1           pension and other retirement benefits as provided for
 
 2           in section 88-  ;
 
 3      (3)  Any pension payable to any minor shall cease when the
 
 4           minor reaches the age of eighteen years[.]; and
 
 5      (4)  If any recipient or beneficiary of a pension, having a
 
 6           spouse or reciprocal beneficiary at the time the
 
 7           pension was first granted to the recipient or
 
 8           beneficiary dies, then the spouse or reciprocal
 
 9           beneficiary[, as long as the spouse or reciprocal
 
10           beneficiary remains unmarried or not in a reciprocal
 
11           beneficiary relationship,] shall be paid sixty per cent
 
12           of the amount of the pension payable to the
 
13           beneficiary[.]; provided that the surviving spouse or
 
14           reciprocal beneficiary makes the election to continue
 
15           to receive pension and other retirement benefits as
 
16           provided for in section 88-  ."
 
17      SECTION 3.  Section 88-74, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "§88-74  Allowance on service retirement.  Upon retirement
 
20 from service, a member shall receive a retirement allowance as
 
21 follows:
 
22      (1)  If the member has attained age fifty-five, a retirement
 

 
 
 
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 1           allowance of two per cent of the member's average final
 
 2           compensation multiplied by the total number of years of
 
 3           the member's credited service as a class A and B
 
 4           member, excluding any credited service as a judge,
 
 5           elective officer, or legislative officer, plus a
 
 6           retirement allowance of one and one-fourth per cent of
 
 7           the member's average final compensation multiplied by
 
 8           the total number of years of prior credited service as
 
 9           a class C member; provided that:
 
10           (A)  After June 30, 1968, if the member has at least
 
11                ten years of credited service of which the last
 
12                five or more years prior to retirement is credited
 
13                service as a firefighter, police officer, or an
 
14                investigator of the department of the prosecuting
 
15                attorney;
 
16           (B)  After June 30, 1977, if the member has at least
 
17                ten years of credited service of which the last
 
18                five or more years prior to retirement is credited
 
19                service as a corrections officer;
 
20           (C)  After June 16, 1981, if the member has at least
 
21                ten years of credited service of which the last
 
22                five or more years prior to retirement is credited
 

 
 
 
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 1                service as an investigator of the department of
 
 2                the attorney general;
 
 3           (D)  After June 30, 1989, if the member has at least
 
 4                ten years of credited service of which the last
 
 5                five or more years prior to retirement is credited
 
 6                service as a narcotics enforcement investigator; 
 
 7           (E)  After December 31, 1993, if the member has at
 
 8                least ten years of credited service of which the
 
 9                last five or more years prior to retirement is
 
10                credited service as a water safety officer; and
 
11           (F)  After June 30, 1994, if the member has at least
 
12                ten years of credited service, of which the last
 
13                five or more years prior to retirement are
 
14                credited service as a public safety investigations
 
15                staff investigator;
 
16           then for each year of service as a firefighter, police
 
17           officer, corrections officer, investigator of the
 
18           department of the prosecuting attorney, investigator of
 
19           the department of the attorney general, narcotics
 
20           enforcement investigator, water safety officer, or
 
21           public safety investigations staff investigator, the
 
22           retirement allowance shall be two and one-half per cent
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1           of the member's average final compensation.  The
 
 2           maximum retirement allowance for those members shall
 
 3           not exceed eighty per cent of the member's average
 
 4           final compensation.  If the member has not attained age
 
 5           fifty-five, the member's retirement allowance shall be
 
 6           computed as though the member had attained age fifty-
 
 7           five, reduced in accordance with factors of actuarial
 
 8           equivalence adopted by the board upon the advice of the
 
 9           actuary; provided that no reduction shall be made if
 
10           the member has at least twenty-five years of credited
 
11           service as a firefighter, police officer, corrections
 
12           officer, investigator of the department of the
 
13           prosecuting attorney, investigator of the department of
 
14           the attorney general, narcotics enforcement
 
15           investigator, public safety investigations staff
 
16           investigator, sewer worker, or water safety officer, of
 
17           which the last five or more years prior to retirement
 
18           is credited service in such capacities;
 
19      (2)  If a contributory member has class C military service
 
20           pursuant to section 88-132.5(g), the member's
 
21           retirement allowance shall be computed in accordance
 
22           with paragraph (1), except that the allowance for the
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1           member's class C military service shall be reduced by
 
 2           one-half per cent for each month the member is less
 
 3           than age sixty-two at retirement, unless the member
 
 4           retires after attaining age fifty-five but before age
 
 5           sixty-two and has at least thirty years of total
 
 6           credited service;
 
 7     [(2)] (3)  If the member has made voluntary additional
 
 8           contributions for the purchase of an additional annuity
 
 9           and has not applied for a refund as permitted by
 
10           section 88-72, the member may accept the refund at the
 
11           time of retirement or, in lieu thereof, receive in
 
12           addition to the retirement allowance provided in
 
13           paragraph (1), an annuity that is the actuarial
 
14           equivalent of the additional contributions with regular
 
15           interest;
 
16     [(3)] (4)  If the member has credited service as a judge, the
 
17           member's retirement allowance shall be computed on the
 
18           following basis:
 
19           (A)  For a member who has credited service as a judge
 
20                before July 1, 1999, irrespective of age, for each
 
21                year of credited service as a judge, three and
 
22                one-half per cent of the member's average final
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1                compensation in addition to an annuity that is the
 
 2                actuarial equivalent of the member's accumulated
 
 3                contributions allocable to the period of such
 
 4                service; and
 
 5           (B)  For a member who first earned credited service as
 
 6                a judge after June 30, 1999, for each year of
 
 7                credited service as a judge, three and one-half
 
 8                per cent of the member's average final
 
 9                compensation in addition to an annuity that is the
 
10                actuarial equivalent of the member's accumulated
 
11                contributions allocable to the period of such
 
12                service.  If the member has not attained age
 
13                fifty-five, the member's retirement allowance
 
14                shall be computed as though the member had
 
15                attained age fifty-five, reduced in accordance
 
16                with factors of actuarial equivalence adopted by
 
17                the board upon the advice of the actuary; or
 
18           (C)  For a judge with other credited service, as
 
19                provided in paragraphs (1) and (2).  If the member
 
20                has not attained age fifty-five, the member's
 
21                retirement allowance shall be computed as though
 
22                the member had attained age fifty-five, reduced in
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1                accordance with factors of actuarial equivalence
 
 2                adopted by the board upon the advice of the
 
 3                actuary; or
 
 4           (D)  For a judge with credited service as an elective
 
 5                officer or as a legislative officer, as provided
 
 6                in paragraph (4).
 
 7           No allowance shall exceed seventy-five per cent of the
 
 8           member's average final compensation.  If the allowance
 
 9           exceeds this limit, it shall be adjusted by reducing
 
10           the annuity included in subparagraphs (A) and (B) and
 
11           the portion of the accumulated contributions specified
 
12           in the subparagraphs in excess of the requirements of
 
13           the reduced annuity shall be returned to the member.
 
14           The allowance for judges under this paragraph, together
 
15           with the retirement allowance provided by the federal
 
16           government for similar service, shall in no case exceed
 
17           seventy-five per cent of the member's average final
 
18           compensation; or
 
19     [(4)] (5)  If the member has credited service as an elective
 
20           officer or as a legislative officer, the member's
 
21           retirement allowance shall be derived by adding the
 
22           allowances computed separately under subparagraphs (A),
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1           (B), (C), and (D) as follows:
 
 2           (A)  Irrespective of age, for each year of credited
 
 3                service as an elective officer, three and one-half
 
 4                per cent of the member's average final
 
 5                compensation as computed under section
 
 6                88-81(d)(1), in addition to an annuity that is the
 
 7                actuarial equivalent of the member's accumulated
 
 8                contributions allocable to the period of service;
 
 9                and
 
10           (B)  Irrespective of age, for each year of credited
 
11                service as a legislative officer, three and one-
 
12                half per cent of the member's average final
 
13                compensation as computed under section
 
14                88-81(d)(2), in addition to an annuity that is the
 
15                actuarial equivalent of the member's accumulated
 
16                contributions allocable to the period of service;
 
17           (C)  If the member has credited service as a judge, the
 
18                member's retirement allowance shall be computed on
 
19                the following basis:
 
20                (i)  For a member who has credited service as a
 
21                     judge before July 1, 1999, irrespective of
 
22                     age, for each year of credited service as a
 

 
 
 
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 1                     judge, three and one-half per cent of the
 
 2                     member's average final compensation as
 
 3                     computed under section 88-81(d)(3), in
 
 4                     addition to an annuity that is the actuarial
 
 5                     equivalent of the member's accumulated
 
 6                     contributions allocable to the period of such
 
 7                     service; and
 
 8               (ii)  For a member who first earned credited
 
 9                     service as a judge after June 30, 1999, and
 
10                     has attained the age of fifty-five, for each
 
11                     year of credited service as a judge, three
 
12                     and one-half per cent of the member's average
 
13                     final compensation as computed under section
 
14                     88-81(d)(3), in addition to an annuity that
 
15                     is the actuarial equivalent of the member's
 
16                     accumulated contributions allocable to the
 
17                     period of such service. If the member has not
 
18                     attained age fifty-five, the member's
 
19                     retirement allowance shall be computed as
 
20                     though the member had attained age fifty-
 
21                     five, reduced in accordance with factors of
 
22                     actuarial equivalence adopted by the board
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1                     upon the advice of the actuary; and
 
 2           (D)  For each year of credited service not included in
 
 3                subparagraph (A), (B), or (C), the average final
 
 4                compensation as computed under section 88-81(d)(4)
 
 5                shall be multiplied by two per cent, two and one-
 
 6                half per cent, or one and one-quarter per cent, as
 
 7                applicable to the credited service earned as a
 
 8                class A, B, or C member, respectively.  If the
 
 9                member has not attained age fifty-five, the
 
10                member's retirement allowance shall be computed as
 
11                though the member had attained age fifty-five,
 
12                reduced in accordance with factors of actuarial
 
13                equivalence adopted by the board upon the advice
 
14                of the actuary.
 
15           The total retirement allowance shall not exceed
 
16           seventy-five per cent of the member's highest average
 
17           final compensation calculated under section
 
18           88-81(d)(1), (2), (3), or (4).  If the allowance
 
19           exceeds this limit, it shall be adjusted by reducing
 
20           any annuity accrued under subparagraphs (A), (B), and
 
21           (C) and the portion of the accumulated contributions
 
22           specified in these subparagraphs in excess of the
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1           requirements of the reduced annuity shall be returned
 
 2           to the member.  If a member has service credit as an
 
 3           elective officer or as a legislative officer in
 
 4           addition to service credit as a judge, then the
 
 5           retirement benefit calculation contained in this
 
 6           paragraph shall supersede the formula contained in
 
 7           paragraph (3)."
 
 8      SECTION 4.  Section 88-76, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§88-76  Allowance on ordinary disability retirement.  Upon
 
11 retirement for ordinary disability, a member shall receive a
 
12 retirement allowance of one and three-fourths per cent of the
 
13 member's average final compensation for each [full] year of
 
14 credited service; except that for each year of credited service
 
15 as a judge, an elective officer, or a legislative officer, the
 
16 member shall receive a retirement allowance computed as provided
 
17 in section [88-74(3) or (4),] 88-74(4) or (5), as applicable[.]
 
18 and except for each year of credited class C military service
 
19 acquired pursuant to section 88-132.5(g), the member shall
 
20 receive a retirement allowance computed as provided in section
 
21 88-284(c).  The minimum retirement allowance payable under this
 
22 section shall be thirty per cent of the member's average final
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1 compensation."
 
 2      SECTION 5.  Section 88-85, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "§88-85  Accidental death benefit.  Upon the receipt of
 
 5 proper proofs of a member's death by the board of trustees, there
 
 6 shall be paid to the member's designated beneficiary or to the
 
 7 member's estate the amount of the member's accumulated
 
 8 contributions and if, upon the receipt of evidence or proofs that
 
 9 the death was the natural and proximate result of an accident
 
10 occurring at some definite time and place while the member was in
 
11 the actual performance of duty, or that the death was due to the
 
12 result of some occupational hazard, the board shall decide that
 
13 the death was the result of an accident in the performance of
 
14 duty and not caused by wilful negligence on the part of the
 
15 member, there shall be paid in lieu of the ordinary death
 
16 benefits provided by the contributions of the State or county, a
 
17 pension of one-half of the average final compensation of the
 
18 member:
 
19      (1)  To the surviving spouse or reciprocal beneficiary of
 
20           the member [to continue until the surviving spouse or
 
21           reciprocal beneficiary remarries, marries, or enters
 
22           into a new reciprocal beneficiary relationship]; or
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1      (2)  If there be no surviving spouse or reciprocal
 
 2           beneficiary, or if the surviving spouse or reciprocal
 
 3           beneficiary dies or [remarries, marries, or enters into
 
 4           a new reciprocal beneficiary relationship] before any
 
 5           child of the deceased member shall have attained the
 
 6           age of eighteen years, then to the deceased member's
 
 7           child or children under such age, divided in such
 
 8           manner as the board in its discretion shall determine,
 
 9           to continue as a joint and survivor pension of one-half
 
10           of the deceased member's final compensation until every
 
11           child dies, or attains such age; or
 
12      (3)  If there is no surviving spouse or reciprocal
 
13           beneficiary or child under the age of eighteen years
 
14           surviving the deceased member, then to the deceased
 
15           member's dependent father or dependent mother, as the
 
16           deceased member shall have nominated by written
 
17           designation duly acknowledged and filed with the board,
 
18           or if there is no such nomination, then to the deceased
 
19           member's dependent father or to the deceased member's
 
20           dependent mother as the board, in its discretion, shall
 
21           direct to continue for life.
 
22      Notwithstanding any other law to the contrary, any condition
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1 of impairment of health caused by any disease of the heart,
 
 2 lungs, or respiratory system, resulting in death to a
 
 3 firefighter, police officer, or sewer worker, shall be presumed
 
 4 to have been suffered in the actual performance of duty at some
 
 5 definite time and place through no wilful negligence on the
 
 6 firefighter's, police officer's, or sewer worker's part, and as a
 
 7 result of the inherent occupational hazard of exposure to and
 
 8 inhalation of smoke, toxic gases, chemical fumes, and other toxic
 
 9 vapors, unless the contrary be shown by competent evidence;
 
10 provided that such firefighter, police officer, or sewer worker
 
11 shall have passed a physical examination on entry into such
 
12 service or subsequent to such entry, which examination failed to
 
13 reveal any evidence of such condition."
 
14      SECTION 6.  Section 88-132.5, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "§88-132.5  Credit for military service.(a)  Any employee
 
17 who becomes a member of the system in accordance with section
 
18 88-42 after June 17, 1996, and has rendered honorable active
 
19 military service in the armed forces of the United States, may be
 
20 credited with membership service credit for active military
 
21 service of up to four years or the actual number of years of
 
22 active military service, whichever is less, as follows:
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1      (1)  Any member with ten years of credited service in the
 
 2           system may be credited with up to two years of
 
 3           membership service credit;
 
 4      (2)  Any member with twenty years of credited service in the
 
 5           system may be credited with up to three years of
 
 6           membership service credit; and
 
 7      (3)  Any member with twenty-five years of credited service
 
 8           in the system may be credited with up to four years of
 
 9           membership service credit.
 
10      (b)  Any employee who became a member of the system in
 
11 accordance with section 88-42 before June 18, 1996, and has
 
12 rendered honorable active military service in the armed forces of
 
13 the United States, may be credited with membership service credit
 
14 for active military service of up to four years or the actual
 
15 number of years of active military service, whichever is less, as
 
16 follows:
 
17      (1)  Any member with eight years of credited service in the
 
18           system may be credited with up to two years of
 
19           membership service credit;
 
20      (2)  Any member with twenty years of credited service in the
 
21           system may be credited with up to three years of
 
22           membership service credit; and
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1      (3)  Any member with twenty-five years of credited service
 
 2           in the system may be credited with up to four years of
 
 3           membership service credit.
 
 4      (c)  For the purposes of subsections (a) and (b), the latest
 
 5 membership date shall be used if there is a change in membership
 
 6 date due to termination and re-entry into the system.
 
 7      (d)  Any retirant who returns to employment, is reenrolled
 
 8 as a member of the system, and has at least three years of
 
 9 credited service in the system during the period of reemployment
 
10 may be credited with membership service credit for active
 
11 military service as provided in subsection (a) or (b); provided
 
12 that membership service credit shall be based upon the member's
 
13 total service.
 
14      (e)  Active military service in the military reserve or
 
15 national guard is not considered active military service unless
 
16 in time of war or declared national or state emergency.
 
17 Membership service creditable under this section shall be
 
18 credited in accordance with sections 88-59 and 88-272.
 
19      (f)  A contributory member's active military service shall
 
20 be considered service in the member's occupation at the time that
 
21 service is credited [and shall be] if the service is purchased at
 
22 the rate specified in section 88-45[, and the].  The retirement
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1 allowance provided by that service shall be calculated as
 
 2 provided in section 88-74.
 
 3      (g)  Beginning July 1, 2000, any active military service
 
 4 that is acquired or for which a refund was made to the member in
 
 5 accordance with this Act, shall be credited as Class C service at
 
 6 the rate of one and one-fourth per cent for each year of credited
 
 7 service.  Any contributory member may exercise the option to
 
 8 purchase active military service as described in subsection (f),
 
 9 to raise the member's base military service credit to a level
 
10 equal to the member's contributory allowance status at the time
 
11 the military service is purchased.  Any election of an option
 
12 under this paragraph shall be made within three months of the
 
13 approval of the application for military service credit by the
 
14 employees' retirement system and shall be final and irrevocable.
 
15      [(g)] (h)  Any violation of this section shall result in the
 
16 forfeiture of the amount of the purchase of membership service
 
17 and loss of benefits and membership service credit for military
 
18 service."
 
19      SECTION 7.  Section 88-163, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "§88-163  Death benefits:  funeral expenses; payments to
 
22 dependents.(a)  Upon the death of any member of the police
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1 force, fire department, or band, as a result of any injury
 
 2 received or disease contracted while in the performance of his
 
 3 duty, or when entitled to a pension under this part or who has
 
 4 been pensioned under this part there shall be paid, for funeral
 
 5 expenses, a sum not to exceed $100.  Should the deceased member
 
 6 leave a dependent widow or reciprocal beneficiary and a child or
 
 7 children under the age of eighteen years, then there shall be
 
 8 paid out of the system $50 per month to the widow until her death
 
 9 [or remarriage] or to the reciprocal beneficiary until death,
 
10 [marriage, or entry into a new reciprocal beneficiary
 
11 relationship] and $7.50 per month to the widow or reciprocal
 
12 beneficiary for each child so long as the child shall reside with
 
13 the widow or reciprocal beneficiary or is supported by the widow
 
14 or reciprocal beneficiary.  Upon the death of such widow or
 
15 reciprocal beneficiary, or in the event the deceased member
 
16 leaves no widow or reciprocal beneficiary but a child or children
 
17 under the age of eighteen years, then there shall be paid out of
 
18 the system $50 per month to the child or children of the deceased
 
19 member under the age of eighteen years with each child, if there
 
20 be more than one, receiving an equal share of the $50 per month
 
21 payment plus $7.50 per month.  All payments to a child of a
 
22 deceased member provided for herein shall cease when he or she
 

 
 
 
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                                     H.B. NO.           H.D. 2
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 1 arrives at the age of eighteen years.
 
 2      (b)  If any member of the police force, fire department, or
 
 3 band, dies not leaving a widow or reciprocal beneficiary, but
 
 4 leaving a father or mother dependent upon him, the father or
 
 5 mother (but not both) shall, upon satisfactory proof of
 
 6 dependency being made to the board of trustees receive from the
 
 7 system a sum not exceeding $50 per month.  The board shall
 
 8 determine whether the father or mother is dependent and how much
 
 9 of the amount herein provided for shall be paid to him or her.
 
10 If there be no widow or reciprocal beneficiary and no child and
 
11 no father or mother, but dependent brothers or sisters, then such
 
12 pension shall be paid to them in such sums as shall not exceed
 
13 the aggregate amount of $30 per month.  All pensions authorized
 
14 as provided in this subsection shall be subject to reduction by
 
15 the board of trustees whenever, in its judgment, circumstances
 
16 make it reasonable, fair, or necessary.  All pensions so reduced
 
17 may thereafter be restored or further reduced as the board may
 
18 deem best.
 
19      (c)  [On the remarriage of any widow or reciprocal
 
20 beneficiary entitled to the benefits of any sum, or in] In the
 
21 event of any father or mother, brothers or sisters [ceasing]
 
22 cease to be dependents then the payments to them shall cease."
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1      SECTION 8.  Section 88-286, Hawaii Revised Statutes, is
 
 2 amended by amending subsections (b) and (c) to read as follows:
 
 3      "(b)  In the case of ordinary death, the death benefit shall
 
 4 be as follows:
 
 5      (1)  For the surviving spouse or reciprocal beneficiary, an
 
 6           allowance equal to one-half of the member's accrued
 
 7           normal retirement allowance unreduced for age, payable
 
 8           [until remarriage, marriage, or entry into a new
 
 9           reciprocal beneficiary relationship[,]] as if the
 
10           member had retired the day prior to death; and for each
 
11           dependent child an allowance equal to ten per cent of
 
12           the member's accrued normal retirement allowance
 
13           unreduced for age, payable until the dependent child
 
14           attains age eighteen; provided that the aggregate death
 
15           benefits for all the dependent children shall not
 
16           exceed twenty per cent of the member's accrued normal
 
17           retirement allowance unreduced for age; or
 
18      (2)  For the surviving spouse [[]or reciprocal
 
19           beneficiary[]], if the member was eligible for
 
20           retirement at the time of death in service, and death
 
21           occurred after June 30, 1990, an allowance that would
 
22           have been payable as if the member had retired the day
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1           prior to death and had elected to receive a retirement
 
 2           allowance under option B of section 88-283; and
 
 3      (3)  If there is no surviving spouse or reciprocal
 
 4           beneficiary, each dependent child shall receive an
 
 5           allowance equal to twenty per cent of the member's
 
 6           accrued normal retirement allowance unreduced for age,
 
 7           payable until the dependent child attains age eighteen;
 
 8           provided that the aggregate death benefits for all the
 
 9           dependent children shall not exceed forty per cent of
 
10           the member's accrued normal retirement allowance
 
11           unreduced for age.
 
12      For the purpose of determining eligibility for the ordinary
 
13 death benefit, a year round school employee shall be considered
 
14 in service during the July and August preceding a transfer to a
 
15 traditional school schedule if the employee was in service for
 
16 the entire prior school year and has a contract for the upcoming
 
17 traditional school year.
 
18      (c)  In the case of accidental death, the death benefit
 
19 shall be as follows:
 
20      (1)  For the surviving spouse[,] or reciprocal beneficiary,
 
21           an allowance equal to thirty per cent of the member's
 
22           average final compensation, payable until [remarriage;]
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1           the death of the surviving spouse or reciprocal
 
 2           beneficiary;
 
 3      (2)  If there is a surviving spouse or reciprocal
 
 4           beneficiary, each dependent child under eighteen shall
 
 5           receive an allowance equal to the greater of:
 
 6           (A)  Ten per cent of the member's accrued normal
 
 7                retirement allowance, unreduced for age; provided
 
 8                that the aggregate death benefits for all the
 
 9                dependent children shall not exceed twenty per
 
10                cent of the member's accrued normal retirement
 
11                allowance unreduced for age; or
 
12           (B)  Three per cent of the member's average final
 
13                compensation; provided that the aggregate death
 
14                benefits for all the dependent children shall not
 
15                exceed six per cent of the member's average final
 
16                compensation.
 
17           The death benefit under this paragraph shall be payable
 
18           to each dependent child until the dependent child
 
19           attains age eighteen; and
 
20      (3)  If there is no surviving spouse or reciprocal
 
21           beneficiary, each dependent child under eighteen shall
 
22           receive an allowance equal to the greater of:
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1           (A)  Twenty per cent of the member's accrued normal
 
 2                retirement allowance, unreduced for age; provided
 
 3                that the aggregate death benefits for all the
 
 4                dependent children shall not exceed forty per cent
 
 5                of the member's accrued normal retirement
 
 6                allowance unreduced for age; or
 
 7           (B)  Six per cent of the member's average final
 
 8                compensation; provided that the aggregate death
 
 9                benefits for all the dependent children shall not
 
10                exceed twelve per cent of the member's average
 
11                final compensation.
 
12           The death benefit under this paragraph shall be payable
 
13           to each dependent child until the dependent child
 
14           attains age eighteen."
 
15      SECTION 9.  Notwithstanding any law to the contrary, members
 
16 who, prior to July 1, 2000, have made lump sum payments or
 
17 additional deductions from their compensation to obtain
 
18 membership service credit for active military service and who
 
19 elect to receive a military service credit at the base military
 
20 service credit rate pursuant to section 88-132.5(f), Hawaii
 
21 Revised Statutes, may receive a refund for all member payments
 
22 and deductions made up to the amount credited under section 88-
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1 132.5, Hawaii Revised Statutes.
 
 2      SECTION 10.  There is appropriated out of the employees'
 
 3 retirement system of the State of Hawaii the sum of $         ,
 
 4 or so much thereof as may be necessary for fiscal year 2000-2001
 
 5 to fund the refunds authorized in section 9 of this Act.
 
 6      The sum appropriated shall be expended by the employees'
 
 7 retirement system for the purposes of this Act.
 
 8      SECTION 11.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 12.  This Act shall take effect on July 1, 2005;
 
11 provided that section 6 shall be effective retroactive to July 1,
 
12 1989.