STAND. COM. REP. NO. 482

Honolulu, Hawaii

RE:    S.B. No. 1950

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 1950 entitled:

"A BILL FOR AN ACT RELATING TO THE RE-EMPLOYMENT OF RETIREES,"

begs leave to report as follows:

     The purpose of this measure is to authorize the rehiring of retired state or county employees in critical-to-fill or labor shortage positions without affecting the receipt of retirement benefits and without accruing additional credit or benefits.

     Your Committee heard testimony in support of this bill from the State Judiciary, Department of Human Resources Development, HGEA, County of Hawai‘i, SHOPO, County of Hawai‘i Police Department, County of Maui.  The Superintendent of the Department of Education submitted supporting testimony with amendments to conform with Act 51, SLH 2004.  The Employees Retirement System submitted comments and concerns.

     The Judiciary echoed the problem that all public employers are facing now and in the future.

The Judiciary, like all other public employers, is charged with providing essential, uninterrupted services to the public.  In order to effectively discharge our responsibility, we need a qualified and stable workforce to accomplish or mission.  In the face of a robust economy which has brought unprecedented low unemployment, coupled with an aging workforce, we are in critical need of additional tools to manage our staffing and human resource requirements. 

     At the present time, 49 percent of the Judiciary's workforce will be eligible to retire within the next five to ten years.  This is a staggering number when considering the challenges we will be facing to recruit and train qualified replacements.

     Your Committee has recognized the changing times and has amended this bill as a preventive measure rather than to wait until the situation is at its worse.  We agree with the HGEA where "the future of civil service depends upon active recruitment of those applicants with the skills, abilities and commitment to a government career . . . current employees who should be considered for promotional opportunities under the civil service merit system.  Reliance upon retirees will not encourage the recruitment and promotion of these career employees."

     Finally, the Employees Retirement System's actuary recommended requiring the employer to make retirement contributions on all positions filled by retirants.  This will help reduce the ERS' $5.1 billion unfunded liability and eliminate any adverse actuarial impact.  This may also encourage the employer to continue their efforts to recruit new employees.  Comments were also included to avoid any conflict with other existing statutes. 

     In consideration of the foregoing, your Commitee has amended the bill with the following:

1. Enlarged the vacant position pool by deleting references to "critical-to-fill or labor shortage occupations";

2. Added a provision to require the employer to continue to make retirement contributions for all positions filled by retirants;

3. Cited appropriate statutes to avoid any conflict with the statutory provision of this Act;

4. Require a retirant to have been retired for at least five consecutive years from the retirant's date of retirement before as a condition for re-employment;

5. Added "medical retirement benefits" that shall continue without penalty to the retirant;

6. Require a retirant filling an included position to join the appropriate collective bargaining unit representing that position;

7. Created two new definitions for "Jurisdiction" and "Executive State Branch" to clarify the Act;

8. Requires annual reporting by jurisdictions that fill positions pursuant to this Act to the Legislature twenty days prior to its convening to include the number of positions filled, the job title, salary and length of time that the retirant was hired and other pertinent information; and

9. Provided a sunset provision of five years.

     Your Committee has also made non-substantive technical changes as recommended by the Legislative Reference Bureau.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1950, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1950, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

____________________________

CLAYTON HEE, Chair