Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 565, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to improve the efficiency of the operations of the Employees' Retirement System.

The bill requires all new retirees and beneficiaries of the Employees' Retirement System who retire after June 30, 2001 to designate a financial institution account into which the Employees' Retirement System may deposit the retirees' or beneficiaries' pensions.

The bill also allows the Employees' Retirement System to waive the direct deposit requirement if another method proves to be more appropriate.

Your Committee finds that "electronic banking" is an efficient, effective, and safe method of transferring funds. For example, Social Security checks can be quickly deposited to recipients' accounts without the fear of theft or misplacement by the post office. Similarly, the direct deposit of Employees' Retirement System pension benefits for thousands of state and county retirees and their beneficiaries can be accomplished with an annual savings to the Employees' Retirement System of approximately $60,000. Government services should take every advantage of technological advances to improve the payment of benefits. This measure authorizes the Employees' Retirement System to do so.

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. 565, H.D. 1, and recommends that it pass Third Reading.