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 S.B. No. 3010, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to amend the pension and retirement systems law relating to firefighters.

In particular, this measure enables a firefighter who has at least ten years of credited service as a firefighter, has been subsequently medically disqualified from services as a firefighter, and subsequently serves in a capacity other than as a firefighter, to retain the two and one-half per cent annual pension accrual rate earned as a firefighter.

Your Committee finds that under existing law, firefighters are provided with a higher annual pension accrual rate than normal class A, contributory members of the Employees' Retirement System, in part because of the risks taken by firefighters.

However, if a firefighter suffers a service-related disability and can no longer fulfill his or her duties, the firefighter is medically disqualified from service as a firefighter. If the medically disqualified firefighter takes a subsequent public sector position, the firefighter loses the right to have the years of service as a firefighter computed at the accelerated pension accrual rate.

Your Committee finds that firefighters who become medically disqualified due to a service-related disability should not have their retirement benefits penalized for assuming the risks of their jobs as firefighters.

Upon further consideration, your Committee has amended this bill by:

1. Deleting section 88-74(5), Hawaii Revised Statutes, as added by section 1 of the bill, and replacing that language with a new subparagraph (G) to section 88-74(1). The new subparagraph specifies that the firefighter must have at least ten years of credited service as a firefighter, is deemed permanently medically disqualified to be a firefighter by the employer's physician, and continues employment in a class A or B position other than as a firefighter;
2. Deleting section 2 of the bill. Your Committee finds that firefighters are not like elected officials, who receive comparatively lower salaries but a higher percentage formula, so a firefighter continuing employment as a general employee should be subject to a regular "high three" average final compensation calculation;
3. Amending the effective date section to provide that the Act is to take effect on July 1, 2002, rather than upon its approval. This amendment is required by the new subparagraph (G) to section 88-74(1); and
4. Renumbering the remaining sections and making other technical, nonsubstantive amendments.

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. 3010, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3010, S.D. 2.