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. 1388 entitled:

begs leave to report as follows:

The purpose of this measure is to establish an optional defined contribution retirement plan for certain qualified exempt public employees.

Testimony in support of the measure was received from the American General Financial Group. The Department of Budget and Finance had concerns with the proposed benefit plan. The Employees' Retirement System submitted comments on the measure.

Your Committee finds that the measure would enable a state officer or employee who is exempt from civil service pursuant to section 76-16(4), (5), (6), (7), (10), and (16), Hawaii Revised Statutes, to participate in a defined contribution retirement plan in lieu of participating in the one established by the Employees' Retirement System.

The optional defined contribution retirement plan would be administered by an optional retirement committee who would determine the types of investment products to be utilized and which agents would represent the optional defined contribution retirement plan.

Employees choosing to participate in the optional defined contribution retirement plan would have the portion of their pay normally assigned to the Employees' Retirement System diverted to the new plan.

Your Committee believes that the establishment of such a plan assists in the attraction of qualified candidates for employment in the specified categories at little cost to government.

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. 1388 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.