STAND. COM. REP. NO. 2396

Honolulu, Hawaii

RE:    S.B. No. 3066

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 3066 entitled:

"A BILL FOR AN ACT RELATING TO THE STATE OF HAWAII DEFERRED COMPENSATION PLAN,"

begs leave to report as follows:

     The purpose of this measure is to assist eligible state and county employees in saving for retirement by automatically enrolling new employees in the State of Hawaii Deferred Compensation Plan.

     Specifically, this measure would automatically enroll eligible state and county employees hired after July 1, 2009, in the State of Hawaii Deferred Compensation Plan; however, new employees would be able to opt out of participating in the plan within ninety days of their enrollment date.  For those employees enrolled in the plan, this measure would deduct one per cent of their gross monthly wages for deposit into a default investment option selected by the Plan's Board of Trustees.

     Your Committee received testimony in support of this measure from the Department of Human Resources Development, the Board of Trustees of the State of Hawaii Deferred Compensation Plan, and the Hawaii County Department of Human Resources.

     Your Committee finds that relying on retirement income from pension and Social Security benefits alone may not be sufficient to meet the needs of many state and county employees due to increasing inflation.  Currently, less than half of state and county employees are enrolled in the State of Hawaii Deferred Compensation Plan, which is offered as a method to save money for retirement and to supplement pension and Social Security benefits.  Your Committee finds that automatic enrollment in the State of Hawaii Deferred Compensation Plan would assist eligible state and county employees to take advantage of this benefit and would allow them to save more money for retirement.

     Upon further consideration, your Committee has amended this measure by:

     (1)  Requiring the State of Hawaii Deferred Compensation Plan administrator to conduct educational interviews with new employees to provide information about the Plan;

     (2)  Changing the effective date to July 1, 2050, to facilitate further discussion on this issue; and

     (3)  Making technical nonsubstantive changes for the purposes of style, clarity, and consistency.

     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. 3066, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3066, 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,

____________________________

BRIAN T. TANIGUCHI, Chair