HB2756.DOC

SECTION 1. Section 88-81, Hawaii Revised Statutes, is amended to read as follows:

"§88-81 Average final compensation. (a) [2007 amendment retroactive to July 1, 2006. L 2007, c 215, §31.] Average final compensation is the average annual compensation pay or salary upon which a member has made contributions as required by parts II, VII, and VIII of this chapter.

(b) The average final compensation of members shall be calculated as follows:

(1) For employees who become members prior to January 1, 1971:

(A) During the member's five highest paid years of credited service, including vacation pay, or the three highest paid years of credited service excluding vacation pay, whichever is greater; or

(B) If the member has less than three years of credited service, during the member's actual years of credited service.

(2) For employees who become members on or after January 1, 1971:

(A) During the member's three highest paid years of credited service, excluding vacation pay; or

(B) If the member has less than three years of credited service, during the member's actual years of credited service.

(3) For employees who become members on or after January 1, 2010:

(A) During the member's five highest paid years of credited service, excluding vacation pay or overtime; or

(B) If the member has less than five years of credited service, during the member's actual years of credited service, excluding vacation pay or overtime.

(c) In computing the compensation of a judge, the compensation paid to the judge by the United States as well as by the Territory shall be included.

(d) For service rendered as a member of the legislature from and after November 5, 1968, the actual annual salary of a member shall be the only amount used for determining the member's average final compensation. For service rendered as a member of the legislature prior to November 5, 1968, and after admission of this State into the Union, the annual compensation of a member shall be computed, for the purpose of determining the member's average final compensation, as follows: during a year in which a general session was held, it shall be deemed to have been an amount equal to four times the salary of a member of the legislature for a general session; and during a year in which a budget session was held, it shall be deemed to have been an amount equal to six times the salary of a member of the legislature for a budget session. For service rendered as a member of the legislature prior to the admission of this State into the Union, the annual compensation of a member shall be deemed to have been four times the salary of a member of the legislature for a regular session for each year during the member's term of office.

(e) [~~If a member has credited service~~] For employees who became members prior to January 1, 2010, and have credited service rendered as an elective officer or as a legislative officer, the member's average final compensation shall be computed separately for each category of service as follows:

(1) For the three highest paid years of credited service as an elective officer, or if the member has less than three years of credited service in that capacity, then the member's actual years of credited service;

(2) For the three highest paid years of credited service as a legislative officer, or if the member has less than three years of credited service in that capacity, then the member's actual years of credited service;

(3) For the three highest paid years of credited service as a judge, or if the member has less than three years of credited service in that capacity, then the member's actual years of credited service; and

(4) For the three highest paid years of credited service not included in paragraph (1), (2), or (3), or if the member has less than three years of credited service in that capacity, then the member's actual years of credited service.

For employees who become members on or after January 1, 2010, and thereafter accrue credited service rendered as an elective officer or as a legislative officer, the member's average final compensation shall be computed separately for each category of service as follows:

(5) For the five highest paid years of credited service, excluding vacation pay or overtime, as an elective officer, legislative officer, judge, or if the member has less than five years of credited service in that capacity, then the member's actual years of credited service, excluding vacation pay or overtime."

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, 2010.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2756
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII