STAND. COM. REP. NO. 19-04
Honolulu, Hawaii
, 2004
RE: H.B. No. 1706
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committee on Higher Education, to which was referred H.B. No. 1706 entitled:
"A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII,"
begs leave to report as follows:
The purpose of this bill is to enable the implementation of an optional retirement system for the University of Hawaii (UH) by:
(1) Clarifying that only UH faculty in collective bargaining unit(7), and other employees excluded from collective bargaining except part-time workers working less than 20 hours per week and temporary employees of three months' duration or less can participate in the optional system;
(2) Specifying that the State shall contribute an amount equal to six percent of a UH employee's salary toward the optional system in lieu of contributions to Employees' Retirement System (ERS); and
(3) Clarifying that individuals who terminate their ERS membership to join the optional system may not transfer back into ERS.
The UH Chief of Staff, Chancellor of UH-Manoa, UH Vice-President for Administration and Chief Financial Officer, and TIAA-CREF submitted testimony in support of this bill. AIG VALIC submitted testimony in support of the intent of the bill and proposed an amendment. The Department of Budget and Finance, UH Professional Assembly, and Hawaii Government Employees Association submitted testimony in opposition to this bill. ERS submitted comments.
Your Committee finds that having an optional retirement system is critical to UH recruitment efforts. While the Legislature previously authorized the establishment of an alternative retirement system at UH, certain elements of the legislation prevented the implementation of the system. In particular, UH's efforts were impaired by the requirement that the employer's share of the cost of the optional retirement system not exceed the equivalent share for employees in ERS.
While this bill addresses this issue, it does not address concerns raised that the optional retirement system would only offer a single vendor to provide investment services and products. To make UH's optional retirement system comparable to those offered at other state universities, a choice of vendors should be provided.
Accordingly, your Committee has amended this bill by:
(1) Requiring that UH contract with at least three investment vendors in implementing the optional retirement system; and
(2) Making technical, nonsubstantive changes for purposes of style and clarity.
As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1706, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1706, H.D. 1, and be referred to the Committee on Labor and Public Employment.
Respectfully submitted on behalf of the members of the Committee on Higher Education,
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____________________________ K. MARK TAKAI, Chair |
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