STAND. COM. REP. NO.  1183

 

Honolulu, Hawaii

                , 2025

 

RE:   S.B. No. 1360

      S.D. 1

      H.D. 1

 

 

 

 

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

 

Madame:

 

     Your Committee on Labor, to which was referred S.B. No. 1360, S.D. 1, entitled:

 

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

 

begs leave to report as follows:

 

     The purpose of this measure is to amend the Employees' Retirement System's requirements for beginning dates and automatic disbursements to reflect the most recent requirements of the Internal Revenue Code of 1986, as amended, to return the accumulated contributions of former non-vested class A or B members.

 

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

 

     Your Committee finds that the Employees' Retirement System undergoes burdensome and costly steps to maintain its beneficial federal tax status while distributing the required minimum distributions to its members.  Your Committee also finds that the automatic distribution requirement for non-vested hybrid members necessitates third-party retirement accounts which must be separately defined as contributions plans, to avoid tax implications on contributions.  The amendments pursuant to this measure streamline the distribution process while ensuring the Employees' Retirement System retains its federal tax status.

 

     Your Committee has amended this measure by changing the effective date to July 1, 3000, to encourage further discussion.

 

     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. 1360, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1360, S.D. 1, H.D. 1, and be referred to your Committee on Finance.

 

 

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

 

 

 

 

____________________________

JACKSON D. SAYAMA, Chair