STAND. COM. REP. NO. 2783

Honolulu, Hawaii

RE:    S.B. No. 2916

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2916, S.D. 1, 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 ensure that the Employees' Retirement System (ERS) has timely access to employee-beneficiary information provided by a public employer.

     Specifically, the measure strengthens the authority of the Employees' Retirement System to obtain needed information from the State and counties by:

(1)  Requiring, rather than authorizing, the ERS to obtain the information;

(2)  Requiring, rather than authorizing, the ERS to specify the format in which the information is to be furnished;

(3)  Requiring the departments and agencies of the State and the counties to furnish that information in the required format;

(4)  Adding, as a category of information with respect to payroll and personnel transactions that the ERS is required to obtain, changes or errors in payments that require correcting or updating;

(5)  Requiring the State or a county to pay on the first day of the fiscal year following the fiscal year in which a department or agency of the State or the county, as applicable, failed to furnish any required information, an amount equal to the employer contributions payable by the State or county during the fiscal year in which the department or agency failed to furnish the required information; and

(6)  Requiring the State or county to pay interest on the unpaid amounts if full payment is not made on the first day of the fiscal year.

     Your Committee received written comments in support of this measure from the Department of Budget and Finance and the Employees' Retirement System.  Written comments in opposition to this measure were received from the Department of Human Resources Development and the Department of Education.

     Your Committee finds that the ERS's personnel and payroll file formats are currently configured to accept corrections, adjustments, and updated information, although most public employers do not take advantage of this capability, resulting in delays in the processing of retirement benefits.  This measure provides a means of addressing government agencies that are tardy in providing historical payroll-related information to the ERS.

     Your Committee has amended this measure by:

(1)  Specifying that if a department or agency is noncompliant, the amount to be paid by the State or county will be relative to that department or agency;

(2)  Requiring the Department of Budget and Finance to submit an annual report to the Legislature on noncompliant departments, amounts payable for failing to furnish required information, and affected budget programs; and

(3)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

     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. 2916, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2916, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair