STAND. COM. REP. NO. 684

Honolulu, Hawaii

RE:    S.B. No. 1269

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 1269, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE DEFINITION OF COMPENSATION FOR PURPOSES OF THE EMPLOYEES' RETIREMENT SYSTEM,"

begs leave to report as follows:

     The purpose and intent of this measure is to amend the definition of "compensation" for the purpose of calculating retirement benefits by:

     (1)  Providing a gradual stepped-down calculation for additional compensation for members of the Employees' Retirement System who are members as of June 30, 2011; and

     (2)  Excluding additional compensation for new members of the Employees' Retirement System.

     Your Committee received written comments in support of this measure from Kalbert Young, Director, Department of Budget and Finance.  Your Committee received written comments in opposition to this measure from Randy Perreira, Executive Director, Hawaii Government Employees Association.  Your Committee received written comments on this measure from John K. Sang.

     Your Committee finds that this measure addresses the unfunded liability of the Employees' Retirement System and is an important step in improving its long-term viability.

     Your Committee has amended this measure by:

     (1)  Clarifying that the term "additional compensation" does not include twelve-month differentials for employees of the Department of Education; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and style.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1269, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1269, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair