Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred H.B. No. 632 entitled:

begs leave to report as follows:

The purpose of this bill is to authorize the Board of Trustees of the Employees' Retirement System (ERS) to include the post retirement allowance as an actuarial assumption in the calculation of a member's retirement benefit.

The ERS Board of Trustees (Board), Hawaii State Teachers Association, and Hawaii Fire Fighters Association testified in support of this measure.

The Board explained that it recently adopted new retirement actuarial tables to make benefit calculations consistent with present-day actuarial practices, assumptions, and calculations. In the process of adopting these new calculation tables, the Board was informed by the actuary that post retirement allowances should also be included as an assumption when determining a member's retirement benefit. However, present laws preclude the Board from adopting these policies. This bill will allow the Board to incorporate the actuaries' recommendations and create factor tables for this purpose.

As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee concurs with the intent and purpose of H.B. No. 632 and recommends that it pass Second Reading and be referred to the Committee on Finance.