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 S.B. No. 1052 entitled:

begs leave to report as follows:

The purpose of this measure is to statutorily set the salary growth assumption rate that the Employees' Retirement System uses to compile actuarial valuation data.

Your Committee finds that the current actuarial valuation data is a variable one based on separate salary growth assumption rate calculations for different professional groups of employees, such as teachers, firefighters, and so on. This variable salary growth assumption rate results in fluctuations in annual appropriations required of state and county employers' contributions to the employee retirement benefit.

Your Committee finds that adopting a single salary growth assumption rate (which in this measure is still unspecified) will reduce the short-term volatility of fluctuating employer contributions.

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 S.B. No. 1052 and recommends that it pass Third Reading.