STAND. COM. REP. NO.  515-08

Honolulu, Hawaii

                , 2008

RE:   H.B. No. 3247

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Sir:

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 3247 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 assist in the recruitment and retention of police officers by providing police officers with a retirement allowance of five percent of the retiree's average final compensation for each year of service.

     The State of Hawaii Organization of Police Officers supported this bill.  The Department of Budget and Finance, Department of Budget and Fiscal Services of the City and County of Honolulu, Finance Department of the County of Hawaii, and Hawaii Government Employees Association opposed this measure.  The Employees' Retirement System (ERS), Department of Finance of the County of Maui, and Hawaii Fire Fighters Association commented on this bill.

     Currently, Hawaii faces a shortage of police officers in each county.  The Honolulu Police Department, alone, has approximately 200 vacancies.  This is due to a number of factors, including compensation issues and recruitment of Hawaii's highly trained officers by other jurisdictions.  Since a decrease in the total number of police officers equates to less police officers protecting Hawaii's highways, streets, and communities, finding a way to recruit and retain these individuals is of high importance.  One way to retain current police officers and recruit new officers is to enhance the retirement benefits available to them.

     Although your Committee notes that Act 256, Session Laws of Hawaii 2007, prohibits benefits enhancements for any members of the ERS until 2011, the importance of this matter warrants further discussion of this issue.

     Your Committee has amended this bill by:

     (1)  Changing the percent of the retirement allowance as a police officer from five percent of the retiree's average final compensation for each year of service to an unspecified amount;

     (2)  Changing its effective date to July 1, 2059, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     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. 3247, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 3247, H.D. 1, 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