Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 1113 entitled:

begs leave to report as follows:

The purpose of this bill is to provide a surviving spouse or reciprocal beneficiary whose benefits from the employees' retirement system were terminated because of remarriage or entry into another reciprocal beneficiary relationship subsequent to the member's death, to apply for reinstatement of the pension or benefit.

In addition, this bill clarifies ambiguities relating to the purchase of military service credit by qualified members of the Employees' Retirement System. In particular, the bill provides that 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 bill is to be credited as class C service at the rate of one and one-fourth per cent for each year of credited service. Contributory members may exercise the option to purchase active military service as described 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. Elections of this option must be made within three months of the approval of the application for military service credit by the Employees' Retirement System and are final and irrevocable. Members who, before July 1, 2001, had made lump sum payments or additional deductions from their compensation to obtain membership service credit for active military service and who elected to receive a military service credit at the base military service credit rate may receive a refund for all member payments and deductions made up to the amount credited.

Your Committee finds that when pension benefits are terminated because of remarriage or entry into another reciprocal beneficiary relationship, the survivor often suffers major economic hardship, surviving minor children are put at risk, or other financial problems occur.

Your Committee has amended this bill by limiting the reinstated benefits to ten years from date of reinstatement. Your Committee finds that this period of time should accommodate circumstances of the presence of young children and allow finances to catch up with the needs of the surviving spouse or reciprocal beneficiary.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1113, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1113, H.D. 1, and be referred to the Committee on Finance.