Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Commerce, Consumer Protection and Housing and Judiciary and Hawaiian Affairs, to which was referred H.B. No. 2558, H.D. 1, entitled:

beg leave to report as follows:

The purpose of this measure is to establish an exemption for 401K plan benefits from the claims of creditors pursuant to attachment, execution, seizure, the operation of bankruptcy or insolvency laws under 11 U.S.C. §522(b), or under any legal process.

Testimony in support of this measure was received from the Representative from the 19^th District of the State of Hawaii, Carlsmith Ball LLP, and Retirement-Coach.

Your Committees find that 401K plans are valuable financial tools for retirement planning that allow individuals to enjoy the benefit of tax-deferred growth on their retirement savings. Your Committees further find that current law affords protection from creditor attachment for similar types of retirement savings vehicles, but not for 401K plans. This measure rectifies this inequity by expanding the scope of state protected retirement vehicles to include 401K plans.

As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection and Housing and Judiciary and Hawaiian Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2558, H.D. 1, and recommend that it pass Second Reading and be placed on the calendar for Third Reading.