REPORT TITLE:
ERS


DESCRIPTION:
Allows the Employees' Retirement System to establish a benefit
restoration plan to protect the benefits of current and future
retirees. (SB1281 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1281
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.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.  Section 88-83.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]§88-83.5[]]  Benefit limitations.(a)  Notwithstanding
 
 4 any other law to the contrary, the benefits payable to all
 
 5 employees who first become members on or after January 1, 1990,
 
 6 shall be subject to the limitations set forth in section 415 of
 
 7 the Internal Revenue Code of 1986, as amended.
 
 8      (b)  Notwithstanding any other law to the contrary, the
 
 9 benefits payable to all employees who first became members before
 
10 January 1, 1990, shall be subject to the greater of the following
 
11 limitations as provided in section 415(b)(10) of the Internal
 
12 Revenue Code of 1986, as amended:
 
13      (1)  The limitations set forth in section 415 of the
 
14           Internal Revenue Code of 1986, as amended; or
 
15      (2)  The benefit of the member without regard to any benefit
 
16           increases pursuant to an amendment adopted after
 
17           October 14, 1987.
 
18      (c)  The system shall establish a benefit restoration plan
 
19 for the payment of retirement benefits as permitted under section
 

 
Page 2                                                     1281
                                     S.B. NO.           S.D. 2
                                                        H.D. 2
                                                        

 
 1 415(m) of the Internal Revenue Code of 1986, as amended, as
 
 2 follows:
 
 3      (1)  All retired members and beneficiaries of the system
 
 4           whose pension has been limited by section 415 of the
 
 5           Internal Revenue Code of 1986, as amended, shall
 
 6           receive a monthly benefit from the benefit restoration
 
 7           plan that is equal to the difference between the
 
 8           retirement benefit otherwise payable and the retirement
 
 9           benefit payable because of section 415;
 
10      (2)  Participation in the benefit restoration plan shall be
 
11           determined for each plan year and shall cease whenever
 
12           the retirement benefit is not limited by section 415 of
 
13           the Internal Revenue Code of 1986, as amended;
 
14      (3)  The benefit restoration plan shall be funded on a plan
 
15           year to plan year basis and shall not be used to pay
 
16           any benefits payable in future years.  Upon the
 
17           recommendation of the actuary, the required
 
18           contribution amount shall be determined by the board of
 
19           trustees and deposited in a separate fund from an
 
20           allocation of employer contribution amounts pursuant to
 
21           chapter 88; and
 
22      (4)  The board of trustees shall have the authority to
 
23           administer the plan and make modifications to the
 

 
Page 3                                                     1281
                                     S.B. NO.           S.D. 2
                                                        H.D. 2
                                                        

 
 1           benefits payable as may be necessary to maintain the
 
 2           qualified status of the plan under section 415(m) of
 
 3           the Internal Revenue Code of 1986, as amended."
 
 4      SECTION 2.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6      SECTION 3.  This Act shall take effect upon its approval.