STAND. COM. REP. NO. 3370

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2458
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 2458, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT
     SYSTEM,"

begs leave to report as follows:

     The purpose of this bill is to reduce the State's and
counties' employer contributions to the Employees' Retirement
System by extending the payment schedule for the actuarial
present value cost of the 1994 early retirement incentive bonus
from five years to nineteen years beginning July 1, 1997.

     Your Committee finds that in 1994, in order to reduce the
payroll costs incurred by the state and county governments, the
Legislature enacted Act 212, Session Laws of Hawaii 1994.  Act
212 provided an early retirement incentive for public employees
with twenty-five or more years of credited service.  Act 212 also
required the State and counties to liquidate the additional
actuarial cost of providing the early retirement incentives over
a five year period.  This measure would extend that liquidation
period from five to nineteen years.

     Your Committee finds that extending the period in which the
State and the counties may liquidate the additional actuarial
cost of providing the early retirement incentives will enable the

 
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                                   STAND. COM. REP. NO. 3370
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State to reallocate its limited resources to higher priority cost
items in the near term without significantly impacting the
solvency of the Employees' Retirement System.  This advantage
outweighs the countervailing increase in the cost of the overall
retirement incentive program to both the State and the counties
because of additional interest costs incurred.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
2458, S.D. 1, and recommends that it pass Third Reading.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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