STAND. COM. REP. NO. 738

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1281
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 1281, 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 make certain changes to the
administration of the Employees' Retirement System.

     Specifically, this bill:

     (1)  Allows the Board of Trustees of the Employees'
          Retirement System to appoint an assistant administrator
          and a chief investment officer; and

     (2)  Requires the Attorney General to personally serve as
          legal adviser to the Board and removes the Board's
          authority to hire outside counsel.

     Your Committee finds that the responsibilities of the
Employees' Retirement System, which provides for retirement
benefits of all public employees of the four counties and the
State, continue to expand as financial investments become more
complex.  Further, as retirants live longer, healthier lives,
they remain part of the retirement system for a longer period.

 
a                                                     SB1281 SD2
 
 
 
                                   STAND. COM. REP. NO. 738
                                   Page 2


     Your Committee has amended this bill by allowing the Board
of Trustees of the Employees' Retirement System to continue to
retain outside counsel if necessary.  Your Committee would like
to see administrative flexibility continue if the Board requires
legal advice or services that the Department of the Attorney
General might be unable to provide due to time or budget
constraints. 

     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 S.B. No.
1281, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 1281, S.D.
2.

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



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
a                                                     SB1281 SD2