Relating To The Employees' Retirement System.
The amendments proposed in HB935 institute significant changes to the structure of post retirement allowances, particularly affecting employees who become members after certain cutoff dates. For example, employees joining after June 30, 2021, will see their post retirement allowances determined by the discretion of the board of trustees rather than a fixed percentage, which could lead to variability in benefits depending on financial stability and decision-making at the board level.
House Bill 935 aims to amend the Employees' Retirement System of the State of Hawaii, primarily focusing on establishing post retirement allowances. The bill seeks to bolster the funding status of the retirement system while preventing future increases to its unfunded actuarial accrued liability. This is seen as a critical step to maintain the system’s viability and ensure long-term benefits for future retirees.
While the bill intends to strengthen the retirement system, it may face contention regarding its potential impact on new employees. Some stakeholders could argue this introduces uncertainty for future retirees, who may not receive the same guaranteed benefits as previous generations. Critics may raise concerns about the implications of having their retirement security hinge on board decisions rather than statutory guarantees, potentially leading to inequities among retirees based on their hire dates.