The legislation will amend Chapter 88 of the Hawaii Revised Statutes to specify conditions under which employees can have their service credit and compensation calculated retroactively. It provides a structured approach for the inclusion of back pay and salary adjustments in the calculation of retirement benefits upon the final decision of a court or arbitrator. This change will likely affect a significant number of state and county employees who contest their dismissals or suspensions, thereby impacting their financial planning and retirement options.
Summary
House Bill 101 (HB101) addresses the Employees' Retirement System in Hawaii by ensuring that certain compensation and service credit awarded to employees are recognized for calculating retirement benefits. The bill clarifies that service and compensation awarded following the adjudication of a court, administrative, or arbitration proceeding shall count towards the retirement benefits of affected employees. This move aims to make retirement compensation fairer by including restored pay and service credit after an employee's successful appeal against involuntary termination or unjust suspension.
Contention
Notable points of contention may arise regarding the potential financial implications for the Employees' Retirement System. Critics may argue that including back pay and service time could lead to increased liabilities for the system, affecting its long-term sustainability. Furthermore, the definitions around what constitutes 'final adjudication' and the specifics on employee contributions to the system may lead to debates over fairness and fiscal responsibility. Ensuring that both employees and employers contribute appropriately could also be a contentious issue as the bill is debated.