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. 1039 entitled:

begs leave to report as follows:

The purpose of this measure is to clarify that any special retirement benefits provided under the Civil Service Reform Act of 2000 will be forfeited if the employee returns to service.

The Employees' Retirement System provided comments on the measure.

Your Committee finds that Act 253, Session Laws of Hawaii 2000 (the Civil Service Reform Act of 2000), conferred on qualified employees the special early retirement incentive benefit of receiving an actuarially-unreduced pension. Although Act 253 did contain provisions which required the forfeiture of the special benefit if the employee subsequently returned to service, no conforming language was added to Chapter 88, Hawaii Revised Statutes, relating to the Employees' Retirement System. In addition, the language contained in Act 253 did not completely address all scenarios in which the forfeiture of the special benefit would occur, leaving loopholes by which special retirement benefit recipients could return to service and still keep their special benefit.

Your Committee believes that it was not the intent of the Legislature to allow employees who retired under Act 253 in order to obtain the special retirement benefit, to subsequently return to service and keep that benefit.

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. 1039 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.