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. (HD1)
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1113 |
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TWENTY-FIRST LEGISLATURE, 2001 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the employees' retirement system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§88- Reinstatement of benefits. A surviving spouse or reciprocal beneficiary whose benefits under this chapter arose from the spouse's or reciprocal beneficiary's membership with the employees' retirement system, and whose pension or benefit was terminated by reason of remarriage or entry into a reciprocal beneficiary relationship occurring subsequent to the death of the member, may apply for reinstatement of the terminated pension or benefit. The level of reinstated pension or benefit payments shall be the amount received by the surviving spouse or reciprocal beneficiary on the date that the payment was terminated, adjusted to reflect ad hoc and scheduled increases from the date of termination to the date of reinstatement; provided that the reinstated pension on benefit payments shall be limited to ten years from the day of reinstatement."
SECTION 2. Section 88-1, Hawaii Revised Statutes, is amended to read as follows:
"§88-1 Restrictions. The provisions of this section shall be applicable to every pension and to every recipient or beneficiary thereof, granted or provided for by any special act of the legislature (other than benefits, or the recipients thereof, payable to beneficiaries or retirants of the employees' retirement system under [part II)] parts II and VII whether the pension be payable by the State or by any county, or by any board, commission, bureau, department, or other agency thereof:
(1) No recipient or beneficiary shall be permitted to draw any pension, or any portion thereof, in excess of $50 per month, while the recipient or beneficiary is holding any salaried position or office in, under, or by authority of the United States, the State, or any political subdivision thereof. This paragraph shall not apply to any recipient or beneficiary who is elected to the legislature or to the council of any county[.];
(2) If the recipient or beneficiary is a surviving spouse or reciprocal beneficiary, the pension so granted shall [cease when the surviving spouse or reciprocal beneficiary remarries, marries, or enters into a new reciprocal beneficiary relationship.] continue; provided that the surviving spouse or reciprocal beneficiary makes the election to continue to receive pension and other retirement benefits as provided for in section 88- ;
(3) Any pension payable to any minor shall cease when the minor reaches the age of eighteen years[.]; and
(4) If any recipient or beneficiary of a pension, having a spouse or reciprocal beneficiary at the time the pension was first granted to the recipient or beneficiary dies, then the spouse or reciprocal beneficiary[, as long as the spouse or reciprocal beneficiary remains unmarried or not in a reciprocal beneficiary relationship,] shall be paid sixty per cent of the amount of the pension payable to the beneficiary[.]; provided that the surviving spouse or reciprocal beneficiary makes the election to continue to receive pension and other retirement benefits as provided in section 88- ."
SECTION 3. Section 88-74, Hawaii Revised Statutes, is amended to read as follows:
"§88-74 Allowance on service retirement. Upon retirement from service, a member shall receive a retirement allowance as follows:
(1) If the member has attained age fifty-five, a retirement allowance of two per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member; provided that:
(A) After June 30, 1968, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney;
(B) After June 30, 1977, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer;
(C) After June 16, 1981, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general;
(D) After June 30, 1989, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator;
(E) After December 31, 1993, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a water safety officer; and
(F) After June 30, 1994, if the member has at least ten years of credited service, of which the last five or more years prior to retirement are credited service as a public safety investigations staff investigator;
then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, water safety officer, or public safety investigations staff investigator, the retirement allowance shall be two and one-half per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced in accordance with factors of actuarial equivalence adopted by the board upon the advice of the actuary; provided that no reduction shall be made if the member has at least twenty-five years of credited service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, or water safety officer, of which the last five or more years prior to retirement is credited service in such capacities;
(2) If a contributory member has class C military service pursuant to section 88-132.5(g), the member's retirement allowance shall be computed in accordance with paragraph (1), except that the allowance for the member's class C military service shall be reduced by one-half per cent for each month the member is less than age sixty-two at retirement, unless the member retires after attaining age fifty-five but before age sixty-two and has at least thirty years of total credited service;
[(2)] (3) If the member has made voluntary additional contributions for the purchase of an additional annuity and has not applied for a refund as permitted by section 88-72, the member may accept the refund at the time of retirement or, in lieu thereof, receive in addition to the retirement allowance provided in paragraph (1), an annuity that is the actuarial equivalent of the additional contributions with regular interest;
[(3)] (4) If the member has credited service as a judge, the member's retirement allowance shall be computed on the following basis:
(A) For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of such service; and
(B) For a member who first earned credited service as a judge after June 30, 1999, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of such service. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced in accordance with factors of actuarial equivalence adopted by the board upon the advice of the actuary; or
(C) For a judge with other credited service, as provided in paragraphs (1) and (2). If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced in accordance with factors of actuarial equivalence adopted by the board upon the advice of the actuary; or
(D) For a judge with credited service as an elective officer or as a legislative officer, as provided in paragraph (4).
No allowance shall exceed seventy-five per cent of the member's average final compensation. If the allowance exceeds this limit, it shall be adjusted by reducing the annuity included in subparagraphs (A) and (B) and the portion of the accumulated contributions specified in the subparagraphs in excess of the requirements of the reduced annuity shall be returned to the member. The allowance for judges under this paragraph, together with the retirement allowance provided by the federal government for similar service, shall in no case exceed seventy-five per cent of the member's average final compensation; or
[(4)] (5) If the member has credited service as an elective officer or as a legislative officer, the member's retirement allowance shall be derived by adding the allowances computed separately under subparagraphs (A), (B), (C), and (D) as follows:
(A) Irrespective of age, for each year of credited service as an elective officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(d)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service; and
(B) Irrespective of age, for each year of credited service as a legislative officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(d)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;
(C) If the member has credited service as a judge, the member's retirement allowance shall be computed on the following basis:
(i) For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(d)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of such service; and
(ii) For a member who first earned credited service as a judge after June 30, 1999, and has attained the age of fifty-five, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(d)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of such service. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced in accordance with factors of actuarial equivalence adopted by the board upon the advice of the actuary; and
(D) For each year of credited service not included in subparagraph (A), (B), or (C), the average final compensation as computed under section 88-81(d)(4) shall be multiplied by two per cent, two and one-half per cent, or one and one-quarter per cent, as applicable to the credited service earned as a class A, B, or C member, respectively. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced in accordance with factors of actuarial equivalence adopted by the board upon the advice of the actuary.
The total retirement allowance shall not exceed seventy-five per cent of the member's highest average final compensation calculated under section
88-81(d)(1), (2), (3), or (4). If the allowance exceeds this limit, it shall be adjusted by reducing any annuity accrued under subparagraphs (A), (B), and (C) and the portion of the accumulated contributions specified in these subparagraphs in excess of the requirements of the reduced annuity shall be returned to the member. If a member has service credit as an elective officer or as a legislative officer in addition to service credit as a judge, then the retirement benefit calculation contained in this paragraph shall supersede the formula contained in paragraph (3)."
SECTION 4. Section 88-76, Hawaii Revised Statutes, is amended to read as follows:
"§88-76 Allowance on ordinary disability retirement. Upon retirement for ordinary disability, a member shall receive a retirement allowance of one and three-fourths per cent of the member's average final compensation for each full year of credited service; except that for each year of credited service as a judge, an elective officer, or a legislative officer, the member shall receive a retirement allowance computed as provided in section [88-74(3) or (4),] 88-74(4) or (5), as applicable[.] and except for each year of credited class C military service acquired pursuant to section 88-132.5(g), the member shall receive a retirement allowance computed as provided in section 88-284(c). The minimum retirement allowance payable under this section shall be thirty per cent of the member's average final compensation."
SECTION 5. Section 88-85, Hawaii Revised Statutes, is amended to read as follows:
"§88-85 Accidental death benefit. Upon the receipt of proper proofs of a member's death by the board of trustees, there shall be paid to the member's designated beneficiary or to the member's estate the amount of the member's accumulated contributions and if, upon the receipt of evidence or proofs that the death was the natural and proximate result of an accident occurring at some definite time and place while the member was in the actual performance of duty, or that the death was due to the result of some occupational hazard, the board shall decide that the death was the result of an accident in the performance of duty and not caused by wilful negligence on the part of the member, there shall be paid in lieu of the ordinary death benefits provided by the contributions of the State or county, a pension of one-half of the average final compensation of the member:
(1) To the surviving spouse or reciprocal beneficiary of the member [to continue until the surviving spouse or reciprocal beneficiary remarries, marries, or enters into a new reciprocal beneficiary relationship]; or
(2) If there be no surviving spouse or reciprocal beneficiary, or if the surviving spouse or reciprocal beneficiary dies or [remarries, marries, or enters into a new reciprocal beneficiary relationship] before any child of the deceased member shall have attained the age of eighteen years, then to the deceased member's child or children under such age, divided in such manner as the board in its discretion shall determine, to continue as a joint and survivor pension of one-half of the deceased member's final compensation until every child dies, or attains such age; or
(3) If there is no surviving spouse or reciprocal beneficiary or child under the age of eighteen years surviving the deceased member, then to the deceased member's dependent father or dependent mother, as the deceased member shall have nominated by written designation duly acknowledged and filed with the board, or if there is no such nomination, then to the deceased member's dependent father or to the deceased member's dependent mother as the board, in its discretion, shall direct to continue for life.
Notwithstanding any other law to the contrary, any condition of impairment of health caused by any disease of the heart, lungs, or respiratory system, resulting in death to a firefighter, police officer, or sewer worker, shall be presumed to have been suffered in the actual performance of duty at some definite time and place through no wilful negligence on the firefighter's, police officer's, or sewer worker's part, and as a result of the inherent occupational hazard of exposure to and inhalation of smoke, toxic gases, chemical fumes, and other toxic vapors, unless the contrary be shown by competent evidence; provided that such firefighter, police officer, or sewer worker shall have passed a physical examination on entry into such service or subsequent to such entry, which examination failed to reveal any evidence of such condition."
SECTION 6. Section 88-132.5, Hawaii Revised Statutes, is amended to read as follows:
"§88-132.5 Credit for military service. (a) Any employee who becomes a member of the system in accordance with section 88-42 after June 17, 1996, and has rendered honorable active military service in the armed forces of the United States, may be credited with membership service credit for active military service of up to four years or the actual number of years of active military service, whichever is less, as follows:
(1) Any member with ten years of credited service in the system may be credited with up to two years of membership service credit;
(2) Any member with twenty years of credited service in the system may be credited with up to three years of membership service credit; and
(3) Any member with twenty-five years of credited service in the system may be credited with up to four years of membership service credit.
(b) Any employee who became a member of the system in accordance with section 88-42 before June 18, 1996, and has rendered honorable active military service in the armed forces of the United States, may be credited with membership service credit for active military service of up to four years or the actual number of years of active military service, whichever is less, as follows:
(1) Any member with eight years of credited service in the system may be credited with up to two years of membership service credit;
(2) Any member with twenty years of credited service in the system may be credited with up to three years of membership service credit; and
(3) Any member with twenty-five years of credited service in the system may be credited with up to four years of membership service credit.
(c) For the purposes of subsections (a) and (b), the latest membership date shall be used if there is a change in membership date due to termination and re-entry into the system.
(d) Any retirant who returns to employment, is reenrolled as a member of the system, and has at least three years of credited service in the system during the period of reemployment may be credited with membership service credit for active military service as provided in subsection (a) or (b); provided that membership service credit shall be based upon the member's total service.
(e) Active military service in the military reserve or national guard is not considered active military service unless in time of war or declared national or state emergency. Membership service creditable under this section shall be credited in accordance with sections 88-59 and 88-272.
(f) A contributory member's active military service shall be considered service in the member's occupation at the time that service is credited [and shall be] if the service is purchased at the rate specified in section 88-45[, and the]. The retirement allowance provided by that service shall be calculated as provided in section 88-74.
(g) Beginning July 1, 2001, any active military service that is acquired or for which a refund was made to the member in accordance with this Act, shall be credited as class C service at the rate of one and one-fourth per cent for each year of credited service. Any contributory member may exercise the option to purchase active military service as described in subsection (f), to raise the member's base military service credit to a level equal to the member's contributory allowance status at the time the military service is purchased. Any election of an option under this paragraph shall be made within three months of the approval of the application for military service credit by the employees' retirement system and shall be final and irrevocable.
[(g)] (h) Any violation of this section shall result in the forfeiture of the amount of the purchase of membership service and loss of benefits and membership service credit for military service."
SECTION 7. Section 88-163, Hawaii Revised Statutes, is amended to read as follows:
"§88-163 Death benefits: funeral expenses; payments to dependents. (a) Upon the death of any member of the police force, fire department, or band, as a result of any injury received or disease contracted while in the performance of his duty, or when entitled to a pension under this part or who has been pensioned under this part there shall be paid, for funeral expenses, a sum not to exceed $100. Should the deceased member leave a dependent widow or reciprocal beneficiary and a child or children under the age of eighteen years, then there shall be paid out of the system $50 per month to the widow until her death [or remarriage] or to the reciprocal beneficiary until death, [marriage, or entry into a new reciprocal beneficiary relationship] and $7.50 per month to the widow or reciprocal beneficiary for each child so long as the child shall reside with the widow or reciprocal beneficiary or is supported by the widow or reciprocal beneficiary. Upon the death of such widow or reciprocal beneficiary, or in the event the deceased member leaves no widow or reciprocal beneficiary but a child or children under the age of eighteen years, then there shall be paid out of the system $50 per month to the child or children of the deceased member under the age of eighteen years with each child, if there be more than one, receiving an equal share of the $50 per month payment plus $7.50 per month. All payments to a child of a deceased member provided for herein shall cease when he or she arrives at the age of eighteen years.
(b) If any member of the police force, fire department or band, dies not leaving a widow or reciprocal beneficiary, but leaving a father or mother dependent upon him, the father or mother (but not both) shall, upon satisfactory proof of dependency being made to the board of trustees receive from the system a sum not exceeding $50 per month. The board shall determine whether the father or mother is dependent and how much of the amount herein provided for shall be paid to him or her. If there be no widow or reciprocal beneficiary and no child and no father or mother, but dependent brothers or sisters, then such pension shall be paid to them in such sums as shall not exceed the aggregate amount of $30 per month. All pensions authorized as provided in this subsection shall be subject to reduction by the board of trustees whenever, in its judgment, circumstances make it reasonable, fair, or necessary. All pensions so reduced may thereafter be restored or further reduced as the board may deem best.
(c) [On the remarriage of any widow or reciprocal beneficiary entitled to the benefits of any sum, or in] In the event of any father or mother, brothers or sisters [ceasing] cease to be dependents then the payments to them shall cease."
SECTION 8. Section 88-286, Hawaii Revised Statutes, is amended by amending subsection (b) and (c) to read as follows:
"(b) In the case of ordinary death, the death benefit shall be as follows:
(1) For the surviving spouse or reciprocal beneficiary, an allowance equal to one-half of the member's accrued normal retirement allowance unreduced for age, payable [until remarriage, marriage, or entry into a new reciprocal beneficiary relationship[,]] as if the member had retired the day prior to death; and for each dependent child an allowance equal to ten per cent of the member's accrued normal retirement allowance unreduced for age, payable until the dependent child attains age eighteen; provided that the aggregate death benefits for all the dependent children shall not exceed twenty per cent of the member's accrued normal retirement allowance unreduced for age; or
(2) For the surviving spouse [[]or reciprocal beneficiary[]], if the member was eligible for retirement at the time of death in service, and death occurred after June 30, 1990, an allowance that would have been payable as if the member had retired the day prior to death and had elected to receive a retirement allowance under option B of section 88-283; and
(3) If there is no surviving spouse or reciprocal beneficiary, each dependent child shall receive an allowance equal to twenty per cent of the member's accrued normal retirement allowance unreduced for age, payable until the dependent child attains age eighteen; provided that the aggregate death benefits for all the dependent children shall not exceed forty per cent of the member's accrued normal retirement allowance unreduced for age.
For the purpose of determining eligibility for the ordinary death benefit, a year round school employee shall be considered in service during the July and August preceding a transfer to a traditional school schedule if the employee was in service for the entire prior school year and has a contract for the upcoming traditional school year.
(c) In the case of accidental death, the death benefit shall be as follows:
(1) For the surviving spouse[,] or reciprocal beneficiary, an allowance equal to thirty per cent of the member's average final compensation, payable until [remarriage;] the death of the surviving spouse or reciprocal beneficiary;
(2) If there is a surviving spouse or reciprocal beneficiary, each dependent child under eighteen shall receive an allowance equal to the greater of:
(A) Ten per cent of the member's accrued normal retirement allowance, unreduced for age; provided that the aggregate death benefits for all the dependent children shall not exceed twenty per cent of the member's accrued normal retirement allowance unreduced for age; or
(B) Three per cent of the member's average final compensation; provided that the aggregate death benefits for all the dependent children shall not exceed six per cent of the member's average final compensation.
The death benefit under this paragraph shall be payable to each dependent child until the dependent child attains age eighteen; and
(3) If there is no surviving spouse or reciprocal beneficiary, each dependent child under eighteen shall receive an allowance equal to the greater of:
(A) Twenty per cent of the member's accrued normal retirement allowance, unreduced for age; provided that the aggregate death benefits for all the dependent children shall not exceed forty per cent of the member's accrued normal retirement allowance unreduced for age; or
(B) Six per cent of the member's average final compensation; provided that the aggregate death benefits for all the dependent children shall not exceed twelve per cent of the member's average final compensation.
The death benefit under this paragraph shall be payable to each dependent child until the dependent child attains age eighteen."
SECTION 9. Notwithstanding any law to the contrary, members who, prior to July 1, 2001, have made lump sum payments or additional deductions from their compensation to obtain membership service credit for active military service and who elect to receive a military service credit at the base military service credit rate pursuant to section 88-132.5(f), Hawaii Revised Statutes, may receive a refund for all member payments and deductions made up to the amount credited under section
88-132.5, Hawaii Revised Statutes.
SECTION 10. There is appropriated out of the employees' retirement system of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2001-2002, to fund the refunds authorized in section 9 of this Act.
The sum appropriated shall be expended by the employees' retirement system for the purposes of this Act.
SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 12. This Act shall take effect on July 1, 2005; provided that section 6 shall be effective retroactive to July 1, 1989.