Bill Text: HI HB1061 | 2018 | Regular Session | Amended
Bill Title: Relating To Employer Contributions To The Employees' Retirement System.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-11-30 - Carried over to 2018 Regular Session. [HB1061 Detail]
Download: Hawaii-2018-HB1061-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1061 |
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TWENTY-NINTH LEGISLATURE, 2017 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO EMPLOYER CONTRIBUTIONS TO THE EMPLOYEES' RETIREMENT SYSTEM.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that after a five-year actuarial investigation performed by the employees' retirement system's actuary as of June 30, 2016, the actuary recommended changing the actuarial assumptions used for the actuarial valuation of the employees' retirement system. The board of trustees of the employees' retirement system adopted the changes to the actuarial assumptions recommended by the actuary. Under the new actuarial assumptions, the period required to amortize the unfunded accrued liability of the employees' retirement system will increase from twenty-seven years to over thirty years.
The contributions from state and county agencies that are necessary for the employees' retirement system to meet its obligations for retirement benefits are based on a percentage of payroll. Under section 88-122, Hawaii Revised Statutes, contribution rates are subject to adjustment if the period required to amortize the unfunded accrued liability of the employees' retirement system exceeds thirty years. To maintain the twenty-seven-year funding period prior to revaluation and assuming that no benefit changes are made, the actuary recommended increasing the employer contribution rates to:
(1) 42.5 per cent for police officers, firefighters, and corrections officers; and
(2) 24.75 per cent for all other employees.
The purpose of this Act is to incrementally increase the rates for employer contributions to the employees' retirement system.
SECTION 2. Section 88-122, Hawaii Revised Statutes, is amended by amending subsection (e) as follows:
"(e) Commencing with fiscal year 2005-2006 and each subsequent
fiscal year[,] until fiscal year 2007-2008, the employer
contributions for normal cost and accrued liability for each of the two groups
of employees in subsection (a) shall be based on fifteen and three-fourths per
cent of the member's compensation for police officers, firefighters, and
corrections officers and thirteen and three-fourths per cent of the member's
compensation for all other employees. Commencing with fiscal year 2008-2009
and each subsequent fiscal year until fiscal year 2011-2012, the employer
contributions for normal cost and accrued liability for each of the two groups
of employees in subsection (a) shall be based on nineteen and seven-tenths per
cent of the member's compensation for police officers, firefighters, and
corrections officers and fifteen per cent of the member's compensation for all
other employees. In fiscal year 2012-2013, the employer contributions for
normal cost and accrued liability for each of the two groups of employees in
subsection (a) shall be based on twenty-two per cent of the member's
compensation for police officers, firefighters, and corrections officers and
fifteen and one-half per cent of the member's compensation for all other
employees. In fiscal year 2013-2014, the employer contributions for normal
cost and accrued liability for each of the two groups of employees in
subsection (a) shall be based on twenty-three per cent of the member's compensation
for police officers, firefighters, and corrections officers and sixteen per
cent of the member's compensation for all other employees. In fiscal year
2014-2015, the employer contributions for normal cost and accrued liability for
each of the two groups of employees in subsection (a) shall be based on
twenty-four per cent of the member's compensation for police officers,
firefighters, and corrections officers and sixteen and one-half per cent of the
member's compensation for all other employees. Commencing with fiscal year
2015-2016 [and each subsequent fiscal year,] until fiscal year
2016-2017, the employer contributions for normal cost and accrued liability
for each of the two groups of employees in subsection (a) shall be based on
twenty-five per cent of the member's compensation for police officers,
firefighters, and corrections officers and seventeen per cent of the member's
compensation for all other employees. In fiscal year 2017-2018, the
employer contributions for normal cost and accrued liability for each of the
two groups of employees in subsection (a) shall be based on twenty-nine per
cent of the member's compensation for police officers, firefighters, and
corrections officers and nineteen per cent of the member's compensation for all
other employees. In fiscal year 2018-2019, the employer contributions for
normal cost and accrued liability for each of the two groups in subsection (a)
shall be based on thirty-three per cent of the member's compensation for police
officers, firefighters, and corrections officers and twenty-one per cent of the
member's compensation for all other employees. In fiscal year 2019-2020, the
employer contributions for normal cost and accrued liability for each of the
two groups in subsection (a) shall be based on thirty-seven per cent of the
member's compensation for police officers, firefighters, and corrections
officers and twenty-three per cent of the member's compensation for all other
employees. Commencing with fiscal year 2020-2021 and each subsequent fiscal year,
the employer contributions for normal cost and accrued liability for each of
the two groups in subsection (a) shall be based on forty-one per cent of the
member's compensation for police officers, firefighters, and corrections
officers and twenty-five per cent of the member's compensation for all other
employees. The contribution rates shall amortize the total unfunded
accrued liability of the entire plan over a period not to exceed thirty years.
The contribution rates shall be subject to adjustment:
(1) If the actual period required to amortize the unfunded accrued liability exceeds thirty years;
(2) If there is no unfunded accrued liability; or
(3) Based on the actuarial investigation conducted in accordance with section 88-105."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2050.
Report Title:
Employees' Retirement System; Employer Contribution Rates
Description:
Incrementally increases the rates for employer contributions to the Employees' Retirement System. (HB1061 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
