STAND. COM. REP. NO. 2441

Honolulu, Hawaii

RE:    S.B. No. 2916

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 2916 entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to require, rather than allow, the Employees' Retirement System to require any department or agency of the State or counties to furnish to the System certain payroll and personnel transaction information, including any changes or errors in payments that require correcting or updating.

     Your Committee received testimony in support of this measure from the Employees' Retirement System.

     Your Committee finds that this measure specifies that, in addition to allocating payments to the periods in which payments are earned and specifying the purpose or nature of the payments, public employers are required to indicate any changes or errors in payments that require correcting or updating.  The Employees' Retirement System testified that its personnel and payroll file formats are configured to accept corrections, adjustments, and updated information, but a number of public employers do not use this capability, which results in delays in the processing of retirement benefits.

     Your Committee notes the suggested language submitted by the Employees' Retirement System that imposes penalties on public employers who fail to submit the required information.

     Accordingly, your Committee has amended this measure, as suggested by the Employees' Retirement System, by:

     (1)  Clarifying that the furnishing of certain payroll and personnel transaction information is required of all departments and agencies of the State or counties;

     (2)  Providing that if a department or agency fails to provide the information, the State or county is required to pay to the System, on the first day of the following fiscal year in which the failure occurred, in an amount equal to the employer contributions payable by the State pursuant to section 88-124, Hawaii Revised Statutes, or by the county pursuant to section 88-126, Hawaii Revised Statutes;

     (3)  Providing that if the required payment is not made on the first day of the fiscal year, any unpaid amounts shall bear interest and any subsequent payments shall be applied first to accrued interest and then to the required payment;

     (4)  Inserting an effective date of July 1, 2016; and

     (5)  Making a technical, nonsubstantive amendment for the purposes of 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. 2916, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2916, 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