REPORT TITLE:
Employee Benefit Plans


DESCRIPTION:
Enables employees of the University of Hawaii and the Department
of Education to invest retirement funds in mutual funds held in
custodial accounts, thereby qualifying for favorable benefits
under federal tax law.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.870        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO EMPLOYEE BENEFIT PLANS. 


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

 1      SECTION 1.  Chapter 303, Hawaii Revised Statutes, is amended
 
 2 as follows:
 
 3      1.  By amending the title to read:
 
 4                           "CHAPTER 303
 
 5        EMPLOYEES' ANNUITY AND CUSTODIAL ACCOUNT CONTRACTS"
 
 6      2.  By amending section 303-1, Hawaii Revised Statutes, to
 
 7 read:
 
 8      "§303-1 Purpose.  The purpose of this chapter is to provide
 
 9 the means by which employees of the department of education and
 
10 the University of Hawaii may qualify for the favorable benefits
 
11 of section 403(b) of the Internal Revenue Code of [1954,] 1986,
 
12 as amended."
 
13      3.  By amending section 303-2, Hawaii Revised Statutes, to
 
14 read:
 
15      "§303-2 Contract for purchase of annuity[.] or investment
 
16 in custodial account.  The department of education and the
 
17 University of Hawaii, on behalf of any employee of the respective
 
18 institutions, may enter into a written agreement with any [such]
 
19 employee to purchase for the employee [an]:
 

 
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                                     H.B. NO.870        
                                                        
                                                        

 
 1      (1)  An annuity contract from an insurer who holds a
 
 2           certificate of authority under section 431:3-201 [or
 
 3           who offers an];
 
 4      (2)  An annuity contract qualified under section 401(k) of
 
 5           the Internal Revenue Code[,] of 1986, as amended, which
 
 6           provides a nationwide retirement trust for a group of
 
 7           college or university football coaches who, due to the
 
 8           nature of their jobs, change employers frequently.
 
 9      The department of education or the University of Hawaii may
 
10 pay amounts to a custodial account established on behalf of the
 
11 employee pursuant to section 403(b)(7) of the Internal Revenue
 
12 Code of 1986, as amended."
 
13      4.  By amending section 303-3, Hawaii Revised Statutes, to
 
14 read:
 
15      "§303-3 Premium withholding.  The department of education
 
16 and the University of Hawaii may also enter into an agreement
 
17 under which the employer shall withhold from the salary of the
 
18 employee the amount of the premiums payable on account of the
 
19 annuity contract[,] or custodial account, and shall make [such
 
20 premium] the payments on behalf of the employee."
 
21      5.  By amending section 303-4, Hawaii Revised Statutes, to
 
22 read:
 

 
 
 
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                                     H.B. NO.870        
                                                        
                                                        

 
 1      "§303-4 Adoption of rules.  Each employer may adopt rules
 
 2 to implement this chapter including[,] but not [by way of
 
 3 limitation,] limited to:
 
 4      (1)  [the] The method of filing an election to accept an
 
 5           adjustment in earnings and revocation of the
 
 6           election[,];
 
 7      (2)  [the] The effective date of an election[,];
 
 8      (3)  [changes] Changes in the amount of the adjustment in
 
 9           earnings[,]; and 
 
10      (4)  [selection] Selection of the insurance company or
 
11           companies from which the annuity contracts are to be
 
12           purchased[.] or to which payments into a qualified
 
13           custodial account are to be made."
 
14      SECTION 2.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 3.  This Act shall take effect on July 1, 1999.
 
17 
 
18                           INTRODUCED BY:  _______________________