HB247 HD1

SECTION 1. Section 88-83, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Upon retirement, any member may elect to receive the maximum retirement allowance to which the member is entitled computed in accordance with section 88-74, 88-76, or 88-80, and in the event of the member's death, there shall be paid to the member's beneficiary, otherwise to the member's estate, the difference between the balance of the member's accumulated contributions at the time of the member's retirement and the retirement allowance paid or payable to the member prior to death.

In lieu of this maximum allowance, the member may elect to receive the member's retirement allowance under any one of the optional plans described below, which shall be actuarially equivalent to the maximum allowance.

Option 1: The member may elect to receive a lesser retirement allowance during the member's lifetime. At the member's retirement, there shall be established an amount of initial insurance that shall be computed on the basis of actuarial factors adopted by the board. Upon the death of the retirant, any balance remaining in the initial insurance reserve, after deducting the retirement allowance paid to the retirant prior to death, shall be paid to the retirant's beneficiary, otherwise to the retirant's estate. In lieu of the lump sum balance, the beneficiary may elect to receive an allowance for life based on the value of the balance; provided that the allowance is not less than $100 per month.

Option 2: The member may elect to receive a lesser retirement allowance during the member's lifetime and have those allowances, including cumulative post retirement allowances, if applicable, continued after the member's death to the member's beneficiary designated at the time of the member's retirement, for the life of the beneficiary. If the beneficiary dies prior to the retirant, all further payments shall cease upon the death of the retirant; provided that [~~for members retiring after November 30, 2004,~~] if the retirant's beneficiary dies at any time after the retirant retired, but before the death of the retirant, the retirant, upon the death of the retirant's beneficiary, shall receive a retirement allowance, including cumulative post retirement allowances, calculated as if the retirant had selected the maximum retirement allowance to which the member is entitled. Only one beneficiary shall be designated under this option. The beneficiary designated under this option shall be a natural person, and benefits under this option shall only be paid to a natural person.

Option 3: The member may elect to receive a lesser retirement allowance during the member's lifetime and have one-half of the allowance, including fifty per cent of all cumulative post retirement allowances, if applicable, continued after the member's death to the member's beneficiary designated at the time of the member's retirement, for the life of the beneficiary. If the beneficiary dies prior to the retirant, all further payments shall cease upon the death of the retirant; provided that [~~for members retiring after November 30, 2004,~~] if the retirant's beneficiary dies at any time after the retirant retired, but before the death of the retirant, the retirant, upon the death of the retirant's beneficiary, shall receive a retirement allowance, including cumulative post retirement allowances, calculated as if the retirant had selected the maximum retirement allowance to which the member is entitled. Only one beneficiary shall be designated under this option. The beneficiary designated under this option shall be a natural person, and benefits under this option shall only be paid to a natural person.

Option 4: The member may elect to receive a lesser retirement allowance during the member's lifetime and provide some other benefit to the member's beneficiary in accordance with the member's own specification; provided that this election shall be certified by the actuary to be the actuarial equivalent of the member's retirement allowance and shall be approved by the board.

Option 5: The member may elect to receive the balance of the member's accumulated contributions at the time of retirement in a lump sum and, during the member's lifetime, a retirement allowance equal to the maximum retirement allowance reduced by the actuarial equivalent of these contributions. Upon the death of the retirant, all further payments shall cease. Only a member retiring from service having at least ten years of credited service or for disability may elect this retirement option.

To receive benefits, the beneficiary must have been designated by the member in the form and manner prescribed by the board."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2059, and shall apply to retirants who retired prior to November 30, 2004; provided that any election to amend a pension payment option made by a retirant pursuant to this Act shall be applied prospectively from the effective date of this Act or the date of the retirant's election to amend the retirant's pension payment option, whichever is later, and shall not entitle the retirant to claim any pension adjustment authorized under this Act against the employees' retirement system for the time period occurring between the date the retirant's beneficiary died and the effective date of this Act, or the date of the retirant's election to amend the retirant's pension payment option, whichever is later.

HOUSE OF REPRESENTATIVES	H.B. NO.	247
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII