STAND. COM. REP. NO. 248

Honolulu, Hawaii

RE:    S.B. No. 133

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 133 entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC EMPLOYEES' FRINGE BENEFITS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Statutorily require the actuary of the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) to prepare an experience study at least once every three years and a valuation report annually; and

     (2)  Reduce the maximum period between experience studies of the Employees' Retirement System (ERS) from five years to three years beginning with fiscal year 2018-2019.

     Your Committee received comments on this measure from the Employees' Retirement System and Hawaii Employer-Union Health Benefits Trust Fund.

     Your Committee finds that state and county contributions as employers for the normal cost and unfunded liability amortization of the ERS and EUTF are increasing and the State's and counties' liabilities and obligations for the pension and health insurance coverage of public employees are of major concern.  Your Committee finds that this measure increases monitoring of the experience and valuations of the ERS and EUTF to aid in the proper planning of future state and county budgetary needs.

     Your Committee has amended this measure by:

     (1)  As recommended by the EUTF:

          (A)  Deleting proposed statutory language that would have required the actuary of the EUTF to prepare an experience study at least once every three years; and

          (B)  Requiring the annual valuation to include an update of assumptions specific to the fund that are not updated by section 88-105, Hawaii Revised Statutes, as determined by the actuary at least once every three years;

     (2)  Inserting an effective date of January 7, 2059, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments 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. 133, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 133, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

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GILBERT S.C. KEITH-AGARAN, Chair