Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 424, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to protect a recipient's weekly unemployment benefit payments from being reduced if the recipient is also receiving pension payments under the Social Security Act or Railroad Retirement Act of 1974.

Your Committee finds that the present employment security law prohibits the State from offsetting pension payments against unemployment benefits, provided that the unemployment benefits are for base periods during which the recipient's services for the employer had no effect on the pension payments.

However, the law makes an exception for pensions paid under the federal Social Security Act and the Railroad Retirement Act of 1974. Accordingly, the receipt of pension payments under those federal statutes allows the State to offset those federal pension payments against the recipient's unemployment benefits, and thereby reduce the amount of unemployment benefits payable to the recipient.

Your Committee finds that the offset provisions penalize retirees who must continue to work in order to maintain a decent standard of living. Eliminating the threat of Social Security offsets will boost the fixed incomes of retirees and hopefully enhance their purchasing power.

Your Committee has amended this measure by making technical nonsubstantive amendments for the purposes of clarity and style.

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. 424, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 424, S.D. 2.