Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 1038 entitled:

begs leave to report as follows:

The purpose of this measure is to transfer the management of the Deferred Compensation Program from the Department of Human Resources to the Employees' Retirement System.

The Employees' Retirement System submitted comments on the measure.

Your Committee finds that the Deferred Compensation Program was established in 1982 and is open to all state and county employees who are members of the Employees' Retirement System. Currently, the Deferred Compensation Program has approximately 27,000 participants and $930 million in assets. In 1996, Act 212, Session Laws of Hawaii 1996, established a similar program for part-time, temporary, seasonal, and casual employees. There are approximately 34,000 participants and $19 million in this plan.

Your Committee believes that the consolidation of the full-time and part-time deferred compensation programs under the Employees' Retirement System is prudent and will:

Your Committee has amended the measure by inserting language that requires the Employees' Retirement System to pay to newly retired employees, interest on pension payments that take longer than ninety days to process and disburse.

Your Committee believes that the amended measure will result in better service for the members of the Employees' Retirement System.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1038, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1038, S.D. 1, and be referred to the Committee on Transportation, Military Affairs and Government Operations.