Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2879, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to amend the law relating to the Employees' Retirement System to conform to the requirements of section 401(a) of the Internal Revenue Code of 1986, as amended.

Specifically, the measure amends the laws relating to the administration of the Employees' Retirement System by:

Your Committee finds that certain provisions are required to be included in the pension plans of state and local governments, pursuant to section 401(a) of the Internal Revenue Code. However, some of these required provisions are not provided for under existing law or pursuant to the rules adopted by the Board of Trustees of the Employees' Retirement System. Your Committee determines that in order to ensure that the tax-qualified status of the Employees' Retirement System is not placed in jeopardy, the law should be amended to remain in compliance with the Internal Revenue Code.

Your Committee has amended this measure by making technical nonsubstantive amendments for purposes of clarity and style and to conform the measure to preferred drafting procedures.

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. 2879, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2879, S.D. 2.