CONFERENCE COMMITTEE REP. NO. 109

Honolulu, Hawaii

                 , 2017

RE:    S.B. No. 936

       S.D. 2

       H.D. 1

       C.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sirs:

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 936, S.D. 2, H.D. 1, entitled:

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

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to update the Employees' Retirement System (ERS) laws relating to pension benefits administration.  Specifically, this measure:

     (1)  Extends the pension benefit adjustment finalization period by one month for those who retire on December 31;

     (2)  Changes the interest rate for late benefit finalizations;

     (3)  Extends the deadline from one to two fiscal years following retirement for employer payments of additional retirement contributions associated with significant non-base pay increases;

     (4)  Allows an entity designated by the ERS Board of Trustees to certify a member's mental or physical incapacity for purposes of determining the member's eligibility for an ordinary disability retirement allowance, service-connected disability benefits, or accidental death benefits; and

     (5)  Incrementally increases the rates for employer contributions to the ERS.

     Your Committee on Conference finds that this measure serves as a housekeeping measure for the ERS to correct and make consistent finalized benefit adjustment periods, address employer concerns regarding payments for pension "spiking", and improve the efficiency of processing disability and accidental death claims.

     Your Committee on Conference has amended this measure by:

     (1)  Inserting as the interest rate for late benefit finalizations an amount to be established by the ERS Board of Trustees that shall be not less than the ninety day United States treasury bill rate as of the end of the prior year plus one per cent per year;

     (2)  Inserting an effective date of July 1, 2017; and

     (3)  Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 936, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 936, S.D. 2, H.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________ AARON LING JOHANSON Co-Chair	____________________________ GILBERT S.C. KEITH-AGARAN Chair
____________________________ DANIEL HOLT Co-Chair	____________________________ JILL N. TOKUDA Co-Chair