Bill Text: HI HB817 | 2011 | Regular Session | Introduced
Bill Title: Employees' Retirement System; Regular Interest
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-02-26 - (H) The committee(s) recommends that the measure be deferred. [HB817 Detail]
Download: Hawaii-2011-HB817-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
817 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to address the employees' retirement system.
More specifically, this Act reduces the percentage of regular interest to be credited to a new public employees' retirement account. The legislature finds that a reduced percentage established pursuant to this Act is comparable to interest on savings accounts, certificates of deposit, and other similar investment vehicles. The legislature further finds that this Act is necessary to control the public employers' contributions to the employees' retirement system.
This Act includes a study to be conducted in the future by the board of trustees of the system on the appropriateness of the new regular interest rate. Based on the study, the board shall recommend changing the rate or keeping it the same.
SECTION 2. Section 88-21, Hawaii Revised Statutes, is amended by amending the definition of "regular interest" to read:
""Regular interest":
(1) For a member who first entered service
before July 1, 2011, interest at four and one-half per cent a year, compounded
annually[.]; and
(2) For a member who enters service after June 30, 2011, interest at two per cent a year, compounded annually."
SECTION 3. Section 88-107, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The board of trustees shall annually allocate the interest and other earnings of the system to the funds of the system, as follows:
(1) The annuity savings fund shall be credited with
the applicable amount of regular interest credited to [members'
accounts;] each member's account;
(2) The expense fund shall be credited with such sums as provided in section 88-116; and
(3) The remaining investment earnings, if any, shall be credited to the pension accumulation fund."
SECTION 4. Section 88-132, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) If the State or county, as the case
may be, fails to pay the contributions within the time specified in subsection
(c), the State or county, as the case may be, shall also pay to the system regular
interest [at the rate of four and one-half per cent a year compounded
annually] from the date the member returned to state or county government
service or the date of the member's death in the performance of the member's
military duty until payment is made. [Interest] Regular interest
paid on the portion of the contributions that would have been payable by the
member shall be included in the member's accumulated contributions."
SECTION 5. Commencing on January 1, 2020, the board of trustees of the employees' retirement system shall conduct a study to determine whether the percentage of regular interest, as defined under section 88-21, Hawaii Revised Statutes, is appropriate. The board shall compare that percentage against the guaranteed percentage of interest paid by other investment or saving vehicles during the fiscal year 2019-2020. The board shall submit a report of the study to the legislature that shall include a recommendation on whether the percentage of "regular interest" should be changed or remain the same. The board shall submit the report not less than twenty days prior to the convening of the regular session of 2021.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2011.
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INTRODUCED BY: |
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Report Title:
Employees' Retirement System; Regular Interest
Description:
Establishes the percentage of "regular interest" credited to the retirement account of a public employee who first enters service after 06/30/11 at 2% as opposed to a public employee who first entered service prior to 07/01/11, whose regular interest percentage is 4 and 1/2%.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
