STAND. COM. REP. NO.266
Honolulu, Hawaii
, 2003
RE: S.B. No. 765
S.D. 1
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. 765 entitled:
"A BILL FOR AN ACT RELATING TO THE RETIREMENT ALLOWANCE FOR PRINCIPALS AND VICE PRINCIPALS,"
begs leave to report as follows:
The purpose of this measure is to enhance public school principals' and vice principals' retirement benefits.
Testimony in support of this measure was submitted by the Hawaii Government Employees Association.
Testimony in support of the intent of this measure was submitted by the Department of Education.
Testimony in opposition to this measure was submitted by the Department of Budget and Finance.
Comments on the measure were submitted by the Employees' Retirement System who will work with its actuary to determine the annual cost impact of the measure to the State and on the Employees' Retirement System's unfunded liability.
The measure proposes to enhance public school principals' and vice principals' retirement benefits by:
(1) Allowing them to retire after twenty-five years of service; and
(2) Increasing their pension accrual rate from either two per cent (class A contributory) or one and one-quarter per cent (class C noncontributory), to two and one-half per cent per credited year of service; provided that certain qualifications are met.
Your Committee finds that the public school system is encountering difficulty in recruiting and retaining qualified administrators. Your Committee believes that in order to attract and retain highly qualified administrators, it is necessary to provide incentives in the form of reduced requirements for retirement eligibility. However, your Committee is reluctant to increase the pension accrual rate of principals and vice principals at this time.
Therefore, your Committee determines that the measure should be amended to strictly address the issue of retirement eligibility and has amended this measure as follows:
(1) By replacing the language in the measure to provide that if the member has at least twenty-five years of credited service, of which the last ten or more years prior to retirement is credited service as a public school principal or vice principal, then upon retirement and irrespective of age, that member's service retirement allowance shall not be reduced for actuarial purposes; and
(2) By amending section 88-281, Hawaii Revised Statutes, to include a new subsection which allows a noncontributory member with at least twenty-five years of credited service, of which the last ten were credited as a public school principal or vice principal, to be eligible to receive a retirement benefit unreduced for age upon retirement.
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. 765, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 765, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Labor,
____________________________ BRIAN KANNO, Chair |
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