STAND. COM. REP. NO.  303

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 1291

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 1291 entitled:

"A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM,"

begs leave to report as follows:

     The purpose of this bill is to clarify and conform existing statutes relating to the Employees' Retirement System (ERS) to current practices.  Among other things, this measure:

     (1)  Allows payment of interest to noncontributory member who      have deductions erroneously made from their                        compensation;

     (2)  Eliminates the eligibility of a foster child to receive        death benefits of a member if the member dies in                   service;

     (3)  Allows the ERS Board of Trustees (Board) to set the            salary of the Chief Investment Officer in the same            manner used to set the salary of the Administrator;

     (4)  Requires contributions exceeding 75 percent of the             statutory cap established for judges, legislative              officers, and elected officials to be refunded when they      leave service to comply with Federal Income Tax laws;

     (5)  Provides post retirement benefits to contributory and              hybrid plan beneficiaries who select a monthly annuity        instead of the lump sum balance;

     (6)  Requires post retirement allowances paid prior to the              death of a contributory or hybrid plan member to be            deducted from the death benefits payable under the            maximum allowance or Option One balance of the insurance          reserve;

     (7)  Prohibits a retirant's beneficiary from electing to            receive a 100 percent survivor benefit in lieu of the              option selected by the retirant under certain                  conditions;

     (8)  Requires the claims for survivor benefits to be filed no      later than three years from the date of the retirant's        death;

     (9)  Deletes the requirement that ordinary death benefits be        computed in the same manner as ordinary disability             benefits for deceased members with 10 years of service        who are not eligible for retirement;

    (10)  Allows the Board to adopt actuarial tables, factors, or           assumptions at a duly notice meeting;

    (11)  Provides criteria for the conversion of noncontributory           service to hybrid service once conversion is allowed;                   and

    (12)  Allows hybrid plan members to retire at any time once             their ordinary disability applications have been                       approved by the Board.

     The Department of Budget and Finance, ERS Board of Trustees, Office of Hawaiian Affairs, and Hawaii State Teachers Association testified in support of this bill.

     Your Committee finds that this bill streamlines the administration of the ERS' and conforms existing statute to current operating practices of the ERS.

     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 is in accord with the intent and purpose of H.B. No. 1291 and recommends that it pass Second Reading and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

____________________________

ALEX M. SONSON, Chair