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. 357 entitled:

begs leave to report as follows:

The purpose of this bill is to provide special compensation for state and county retirees over age sixty-five who have at least ten years of service, to assist with their living expenses.

Your Committee finds that retirees living on fixed incomes find it increasingly difficult to cope with the rising cost of living in Hawaii. These retirees, as state and county workers, made contributions that significantly assisted the state employees retirement system in building up its assets, which are now over $9,000,000,000. A small portion of those funds should be directed back to the retirees, who deserve retirement with dignity.

The special compensation is calculated by multiplying a factor, starting at $1.25 per month, by the retiree's number of years in service. The factor increases every five years.

Testimony in support of the bill was received from the Department of Budget and Finance and the President of the HGEA Retirees Unit. Testimony in opposition was received from the Oahu Retired Teachers Association. Concerns about the bill were also expressed by the Employees Retirement System.

Your Committee has amended this bill by increasing the service requirement to twenty years, and increasing the beginning date to receive the special compensation increment added by this bill from sixty-five to seventy. Your Committee has made these changes to balance the competing concerns of the Employees Retirement System's increase in unfunded liability under this bill, and the need to provide adequate level of retirement benefits for older retirees. It is the intent of your Committee, by this change, to exclude non-career public employees with shorter years of service, particularly those who have entered public service for the primary purpose of receiving an additional pension and free medical benefits.

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. 357, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 357, H.D. 1, and be referred to the Committee on Finance.