Bill Text: HI HB393 | 2020 | Regular Session | Amended
Bill Title: Relating To The Hawaii Employer-union Health Benefits Trust Fund.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2020-06-22 - Received notice of discharge of all House conferees (Hse. Com. No. 363). [HB393 Detail]
Download: Hawaii-2020-HB393-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
393 |
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THIRTIETH LEGISLATURE, 2019 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 87A, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:
"§87A-A Fiduciary duties; prohibited transactions. (a)
A fiduciary of the trust shall comply, with respect to a plan, with all
fiduciary duties imposed on fiduciaries under title 29 United States Code sections
1001-1191c, as amended, and related regulations.
(b) All fiduciaries of the trust shall discharge
their duties with respect to a plan solely in the interest of the participants
and beneficiaries and:
(1) For the
exclusive purpose of:
(A) Providing
benefits to participants and their beneficiaries; and
(B) Defraying
reasonable expenses of administering the plan;
(2) With the care,
skill, prudence, and diligence under the circumstances that a prudent person
acting in a similar capacity and familiar with those matters would use in the
conduct of an enterprise of a similar character and with like aims;
(3) Diversify the
investments of the plan so as to minimize the risk of large losses, unless,
under the circumstances, it is clearly prudent not to do so; and
(4) Act in
accordance with the documents and instruments governing the plan insofar as
such documents and instruments are consistent with the provisions of this
chapter.
(c) In addition to any liability that a fiduciary
may have under this chapter, a fiduciary with respect to a plan shall be liable
for a breach of fiduciary responsibility of another fiduciary with respect to
the same plan in the following circumstances:
(1) If the
fiduciary participates knowingly in, or knowingly undertakes to conceal, an act
of omission of the other fiduciary, knowing that act or omission is a breach;
(2) If, by the
fiduciary's failure to comply with subsection (a) or (b), the fiduciary has
enabled the other fiduciary to commit a breach; or
(3) If the
fiduciary has knowledge of the breach by the other fiduciary, unless the other
fiduciary makes reasonable efforts under the circumstances to remedy the
breach.
If the assets of the plan are
held by two or more trustees, each shall use reasonable care to prevent a
co-trustee from committing a breach, and each shall be responsible for jointly
managing and controlling the assets of the plan.
(d) A fiduciary shall not cause a plan to engage
in a transaction, if the fiduciary knows or should know that the transaction
constitutes a direct or indirect:
(1) Sale or
exchange, or leasing, of any property between the plan and a party in interest;
(2) Lending of
money or other extension of credit between the plan and a party in interest;
(3) Furnishing of
goods, services, or facilities between the plan and a party in interest; or
(4) Transfer to, or
use by or for the benefit of, a party in interest, of any assets of the plan.
(e) A fiduciary shall not:
(1) Deal with the
assets of the plan in the fiduciary's own interest or for the fiduciary's own personal
account;
(2) In the
fiduciary's individual capacity or in any other capacity act in any transaction
involving the plan on behalf of a party, or represent a party, whose interests
are adverse to the interests of the plan or the interests of its participants
or beneficiaries; or
(3) Receive any
consideration for the fiduciary's own personal account from any party dealing
with the plan in connection with a transaction involving the assets of the
plan.
For the
purposes of this section, a "fiduciary" or "fiduciary of the
trust" shall mean a member of the board of trustees.
§87A-B Liability for breach of fiduciary duty.
(a) Any person who is a fiduciary with respect to
a plan and who breaches any of the responsibilities, obligations, or duties
imposed on fiduciaries by this chapter shall be personally liable for
reimbursing the plan for any losses to the plan resulting from each breach, and
restoring to the plan any profits of the fiduciary that have been made through
the use of assets of the plan by the fiduciary, and shall be subject to any
other equitable and remedial relief as a court may deem appropriate, including
removal of the fiduciary.
(b) Any provision in any agreement or instrument
that purports to relieve a fiduciary of responsibility or liability for any
responsibility, obligation, or duty under this chapter shall be void as against
public policy; however, nothing in this section shall preclude:
(1) A plan from
purchasing insurance for its fiduciaries or for itself to cover liability or
losses occurring by reason of the act or omission of a fiduciary in the case of
a breach of a fiduciary obligation by the fiduciary, provided that the
insurance permits recourse by the insurer against the fiduciary in the case of
a breach of fiduciary obligation by the fiduciary;
(2) A fiduciary
from purchasing insurance to cover liability under this chapter from and for
the fiduciary's own personal account; or
(3) An employee
organization from purchasing insurance to cover potential liability of one or
more persons who serve in a fiduciary capacity with regard to an employee
welfare benefit plan."
SECTION 2. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on January 1, 2050.
Report Title:
EUTF; Fiduciary Duties; Prohibited Transactions; Liabilities
Description:
Creates a fiduciary duty on EUTF trustees. Prohibits transactions where the trustee has a conflict of interest. Establishes liabilities for breach of fiduciary duty. (HB393 HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
