Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.C.R. No. 130 entitled:

begs leave to report as follows:

The purpose of this measure is to request the Auditor to conduct a management and performance audit of the Employees' Retirement System (ERS).

Recent events regarding the ERS, especially the reported loss of $1.4 billion due to poor investment performance, and questions regarding the retention of an underperforming investment firm with ties to a former ERS administrator, have brought to light some possible problems within the ERS that your Committee believes need to be examined through an audit.

Your Committee believes that an audit may help to improve the overall structural set-up, management, and efficiency of the ERS.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 130, and recommends its adoption.