CONFERENCE COMMITTEE REP. NO. 118-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 2073

S.D. 2

H.D. 2

C.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 2073, S.D. 2, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this measure is to amend the law authorizing the University of Hawaii (UH) to establish an optional retirement system for its eligible employees.

Specifically, this measure:

(1) Provides that employees who are eligible for participation in the optional retirement system include employees who are members of collective bargaining units (7) and (8), except part-time employees working less than twenty-hours per week or temporary employees, employees excluded from bargaining units (7) and (8), and appointees of the Board of Regents who are eligible for membership in the employees' retirement system;

(2) Requires the Board of Regents to designate at least three investment vendors for the optional retirement system, based upon specified criteria;

(3) Requires the State to pay to UH an annual contribution amount of six per cent of the employee's compensation;

(4) Prohibits the State's annual contribution from exceeding the amount of the State's contribution on behalf of the Governor to the employees' retirement system;

(5) Requires UH to pay for any contribution amount owed on behalf of the employee in excess of the State's contribution.

Your Committee on Conference finds that the existence of an optional retirement system is crucial to UH's efforts to recruit and retain qualified employees. Although the law provides for the establishment of an alternative retirement system at UH, the law also limits the employer's contribution to an optional retirement plan to the amount for any group covered by the employees' retirement system. This limitation renders the implementation of an optional system for UH essentially impossible, as the amount of the employer's contribution fluctuates based on market conditions. Your Committee on Conference determines that this limitation should be removed and that the State should be required to remit to UH an amount equal to six percent of the employee's compensation, an amount determined to be the normalized employer contribution rate for the employees' retirement system, in lieu of any contribution it would have made on the employee's behalf.

Additionally, because employees in higher education are often highly mobile, UH's optional retirement system should be comparable to those offered at other state universities, including a choice of investment vendors, to enable UH to compete with other universities for the most qualified individuals.

Your Committee on Conference has worked closely with the interested parties, including the Board of Regents and the Hawaii Government Employees Association, to craft language that will optimize the objectives of the parties. Therefore, upon further consideration, your Committee on Conference has amended this measure by:

(1) Limiting the employees who are eligible for participation in the optional retirement system to appointees of the UH Board of Regents, on or after the effective date of the Act, who are eligible for membership in the employees' retirement system;

(2) Requiring UH to make an annual contribution to the optional retirement system on behalf of an employee;

(3) Specifying that the State's annual contribution for any employee shall not exceed six per cent of $100,000;

(4) Clarifying that upon election of enrollment in the optional retirement system, a person who remains employed by UH may not transfer from the optional retirement system to the employees' retirement system;

(5) Prohibiting service under the optional retirement system from being creditable as service under the employees' retirement system;

(6) Making the Act effective upon its approval and repealed on July 1, 2009, rather than effective on July 1, 2010; and

(7) Making technical, nonsubstantive changes for purposes of clarity and style.

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 2073, S.D. 2, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 2073, S.D. 2, H.D. 2, C.D. 1.

 

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________

K. MARK TAKAI, Co-Chair

____________________________

BRIAN KANNO, Co-Chair

____________________________

MARCUS R. OSHIRO, Co-Chair

____________________________

NORMAN SAKAMOTO, Co-Chair

____________________________

DWIGHT Y. TAKAMINE, Co-Chair

____________________________

BRIAN T. TANIGUCHI, Co-Chair