Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Education and Military Affairs and Labor, to which was referred S.B. No. 2705 entitled:

beg leave to report as follows:

The purpose of this measure is to allow for the re-hiring of retired teachers within the Department of Education without the loss of retirement benefits for as long as the department has a declared shortage.

Your Committees received testimony in support of this measure from the Governor, the Hawaii Teacher Standards Board, and the Hawaii State Teachers Association. Comments in support of the intent of this measure were received from the Department of Education and the Hawaii Government Employees Association.

Your Committees find that as long as the department has areas of declared shortages, measures must be taken to support students and new teachers by tapping into the wealth of experience shared by teachers and administrators retired from the system. However, your Committees recognize that a material cost impact of this measure will be to increase the employees' retirement system's unfunded liability, as the system will be losing the employer contribution that would have been paid if the position were filled by an active employee. Therefore, to support continuity and stability, your Committees determine that the department should continue to remit its employer contribution to the system.

Your Committees have amended this measure by removing its five-year sunset provision, making retired administrators eligible for re-hiring, requiring the department of education to contribute 13.75% of the re-hired employee's compensation to the employees' retirement system, and by making technical, nonsubstantive amendments.

As affirmed by the records of votes of the members of your Committees on Education and Military Affairs and Labor that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2705, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2705, S.D. 1, and be referred to the Committee on Ways and Means.