Hawaii-2017-HR97-Introduced

WHEREAS, recent trends and economic conditions, including the economic downturn experienced during the mid-2000s, have increased credit card debt and student loan debt and have resulted in individuals saving less money for their retirement; and

WHEREAS, as the population of the United States continues to age, it is imperative that individuals plan for their financial stability during their retirement years; and

WHEREAS, recent studies and surveys have found that only 37 percent of individuals have enough savings to cover $500 in unexpected expenses; 56.3 percent of individuals have less than $1,000 in savings; and approximately 33 percent of families have no savings at all; and

WHEREAS, surveys conducted solely on retirement savings have found that 56 percent of individuals have less than $10,000 saved for retirement; and

WHEREAS, this lack of retirement savings has caused retirees to increasingly rely solely on Social Security as a financial means of support during their retirement years, with 21 percent of married couples and 43 percent of unmarried persons relying on Social Security for 90 percent of their total income in 2016; and

WHEREAS, although options exist for Americans to establish retirement savings, such as individual retirement accounts, many of these options require minimum deposits that cannot be met by individuals with little disposable income; and

WHEREAS, deferred compensation plans, plans where a portion of an employee's earnings is set aside to be paid at a later date with taxes being deferred until those earnings are paid out, offer individuals another means of saving for retirement; and

WHEREAS, deferred compensation plans may make it easier for minimum wage and lower wage employees to set aside more savings for retirement since employees could have as little as one percent of their earnings placed into a deferred compensation plan account; and

WHEREAS, while employers in Hawaii currently face increasing operating costs because of mandatory prepaid healthcare benefits, workers' compensation insurance requirements, and temporary disability insurance costs, among other things, the costs of requiring employers to offer deferred compensation plans to employees working at least 20 hours per week are unknown; and

WHEREAS, the societal costs of having large numbers of individuals with no means of financial support during their retirement years are great, as many individuals in need will turn to government assistance programs and thereby place a tremendous strain on all sectors of the population; and

WHEREAS, the availability and use of deferred compensation plans by individuals who are not yet retired may have a significant impact on reducing the number of individuals with no means of financial support during their retirement years; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-ninth Legislature of the State of Hawaii, Regular Session of 2017, that a working group be established to determine the feasibility of requiring employers to offer deferred compensation plans to all employees working at least 20 hours per week; and

BE IT FURTHER RESOLVED that in determining the feasibility of requiring employers to offer deferred compensation plans, the working group examine:

(1) The costs to employers for offering and implementing deferred compensation plans;

(2) The benefits deferred compensation plans would provide individual employees;

(3) Whether individual employees would be more likely to use deferred compensation plans if these plans are offered by employers;

(4) Any impacts increased use of deferred compensation plans would have on government assistance programs such as Medicaid;

(5) Any enforcement issues that would need to be addressed to ensure compliance with any established requirements; and

(6) Any other issue deemed necessary by the working group; and

BE IT FURTHER RESOLVED that the working group consist of:

(1) The Speaker of the House of Representatives, or the Speaker's designee;

(2) The President of the Senate, or the President's designee;

(3) The Director of Commerce and Consumer Affairs, or the Director's designee, who shall serve as Chair;

(4) The Director of the Executive Office on Aging, or the Director's designee;

(5) The Chairperson of the Board of Trustees of the Employees' Retirement System, or the Chairperson's designee;

(6) The President of The Chamber of Commerce Hawaii, or the President's designee;

(7) The Hawaii State Director of AARP, or the Director's designee;

(8) A member representing a bank, credit union, or other financial institution to be selected by the Chair of the working group;

(9) A member of the public who is a retiree to be selected by the Chair of the working group; and

(10) A member who is a private employer that currently offers a deferred compensation plan to their employees to be selected by the Chair of the working group; and

BE IT FURTHER RESOLVED that the working group submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than 20 days prior to the convening of the Regular Session of 2018; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Director of Commerce and Consumer Affairs, Chairperson of the Board of Trustees of the Employees' Retirement System, Director of the Executive Office on Aging, President of The Chamber of Commerce Hawaii, and Hawaii State Director of AARP.

	OFFERED BY:	_____________________________

Report Title:

Establishes a working group to determine the feasibility of requiring employers to offer deferred compensation plans to individuals working at least twenty hours per week.

HOUSE OF REPRESENTATIVES	H.R. NO.	97
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII