Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 1312 entitled:

begs leave to report as follows:

The purpose of this measure is to compensate retirees whose pensions are not finalized within six months of retirement due to delays in the finalization process and to allow the Employees' Retirement System (ERS) to assess employing agencies a fee if they fail to provide the ERS with the necessary information to properly finalize a retiree's pension.

Testimony in support of this measure was received by the Employees' Retirement System and the Hawaii State Teachers Association.

Testimony in opposition to this measure was received by the Department of Human Resources for the City and County of Honolulu and the Department of Personnel Services for the County of Maui.

Your Committee finds that if there is a delay in the finalizing of a retiree's pension, no interest accrues as a result of this delay. Your Committee also finds that retirees are deserving of the timely processing of their pensions and should receive interest on any amounts outstanding due to a pension finalization delay. Therefore, your Committee believes that agencies should be assessed a fee for their delay in transmitting information to the ERS, and retirees should receive interest accrued during the finalizing of pensions, if the finalization process takes longer than six months.

Your Committee is concerned over the mandatory imposition of the $10 penalty per month on agencies who otherwise consistently attempt to timely comply with the requests for information by the ERS. In addition, your Committee is concerned with appropriating funds for the purpose of upgrading an already antiquated computer system. In light of these concerns, your Committee has amended this measure as follows:

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. 1312, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1312, S.D. 1, and be referred to the Committee on Ways and Means.