STAND. COM. REP. NO.  307-10

Honolulu, Hawaii

                , 2010

RE:   H.B. No. 2538

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Sir:

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 2538 entitled:

"A BILL FOR AN ACT RELATING TO THE PAYMENT OF EMPLOYEES' RETIREMENT SYSTEM BENEFITS,"

begs leave to report as follows:

     The purpose of this bill is to switch the payments of Employees' Retirement System (ERS) benefits from a semi-monthly mailed paper check basis to a monthly basis by direct deposit to save in postage, printing, and bank fees.

     The ERS testified in support of this bill.  The Hawaii Government Employees Association provided comments.

     Your Committee notes that passage of this bill will streamline the processing of ERS pension payments.  25,700 out of 38,000 pensioners and beneficiaries would be paid monthly rather than semi-monthly.  Additionally, 1,400 would change to direct deposit into a financial institution instead of receiving paper checks.  These changes will result in cost savings and increase ERS' investment earnings.

     However, your Committee also notes the concerns raised that the changing of payment methods to retirees may present a financial burden to older retirees.  Therefore, the ERS is strongly encouraged to clearly inform those affected by these changes well in advance of the change.

     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. 2538 and recommends that it pass Second Reading and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

____________________________

KARL RHOADS, Chair