STAND. COM. REP. NO. 2467

Honolulu, Hawaii

RE: S.B. No. 2333

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 2333 entitled:

"A BILL FOR AN ACT RELATING TO RETIREMENT SAVINGS,"

begs leave to report as follows:

The purpose and intent of this measure is to establish a Hawaii Retirement Savings Board to administer the Hawaii Retirement Savings Plan for private sector employees.

Your Committee received testimony in support of this measure from AARP Hawai‘i, Hawaii Appleseed Center for Law & Economic Justice, and two individuals. Your Committee received testimony in opposition to this measure from the National Association of Insurance and Financial Advisors. Your Committee received comments on this measure from the Department of Budget and Finance.

Your Committee finds that there is an imminent retirement security crisis in the State, as many individuals do not have access to an employer-sponsored retirement plan. Your Committee further finds that approximately fifty percent of the State's private sector employees work for an employer that does not offer a retirement plan or are not eligible for the plan offered. The lack of opportunity to participate in an employer-provided retirement plan spans all levels of education and earnings. A lifelong savings system that provides individuals with the opportunity to build their assets and attain future financial stability provides the means by which individuals can retire and achieve economic security, improved economic mobility, and reduced wealth disparity.

Your Committee acknowledges that this measure is a work in progress and as such, your Committee has amended this measure by:

(1) Adding two community representatives to the Hawaii Retirement Savings Board, one to be selected by the President of the Senate and one to be selected by the Speaker of the House of Representatives;

(2) Adding language to allow for a request for proposals to be issued for a third party to conduct the market analysis;

(3) Requiring a preliminary report be submitted to the Legislature prior to the Regular Session of 2019 and a final report to be submitted prior to the Regular Session of 2020;

(4) Authorizing the Department of Budget and Finance to adopt interim rules as necessary for the market analysis;

(5) Appropriating funds for the market analysis;

(6) Extending the date by which the retirement savings plan must be established so that individuals may begin making contributions no later than July 1, 2021, rather than July 1, 2020;

(7) Inserting an effective date of January 1, 2050, to encourage further discussion; and

(8) 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 Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2333, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2333, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

JILL N. TOKUDA, Chair