Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2460, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to reduce the annual contributions of public employers to the Employees' Retirement System by amortizing the liquidation of the unfunded accrued liability over a longer period of time.

Specifically, the bill provides for liquidating the liability over a twenty-nine-year period beginning July 1, 2000 and ending June 2030, instead of over the fifteen-year period ending June 30, 2016, as provided under existing law.

Your Committee finds that if the State and counties are given a longer time to amortize the Employees' Retirement System's unfunded accrued liability, the annual payments will be reduced and the employers will be able to better handle budgetary shortfalls that have resulted from the September 11th tragedy. This longer time period will also allow the fiscal picture to settle into a less volatile framework so that public services can continue at an even pace.

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. 2460, H.D. 2, and recommends that it pass Third Reading.