Hawaii 2024 Regular Session

Hawaii House Bill HB387 Compare Versions

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11 HOUSE OF REPRESENTATIVES H.B. NO. 387 THIRTY-SECOND LEGISLATURE, 2023 STATE OF HAWAII A BILL FOR AN ACT relating to the employees' retirement system. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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4747 SECTION 1. Section 87A-36, Hawaii Revised Statutes, is amended to read as follows: "§87A-36 State and county contributions; employees hired after June 30, 2001, and retired. (a) This section shall apply to state and county contributions to the fund for employees hired after June 30, 2001, and who retired, except that this section shall not apply to the following employees, for whom state and county contributions shall be made as provided by section 87A-35: (1) An employee hired after June 30, 1996, and prior to July 1, 2001, who transfers employment after June 30, 2001, and who cumulatively accrues at least ten years of credited service; and (2) An employee hired after June 30, 1996, and prior to July 1, 2001, who has at least ten years of credited service prior to a break in service. For purposes of this section: "Break in service" means to leave state or county employment for more than ninety calendar days before returning to state or county employment. "Transfer" means to leave state or county employment and return to state or county employment within ninety calendar days. (b) For purposes of this section, if an employee leaves state or county employment and returns to state or county employment after July 1, 2001, upon retirement, the employee's years of service shall be computed in the same manner as set forth in chapter 88. (c) The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund: (1) For retired employees based on the self plan with ten or more years but fewer than fifteen years of service, a monthly contribution equal to one-half of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b); (2) For retired employees based on the self plan with at least fifteen but fewer than twenty-five years of service, a monthly contribution equal to seventy-five per cent of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b); (3) For retired employees based on the self plan with twenty-five or more years of service, a monthly contribution equal to one hundred per cent of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b); and (4) One-half of the monthly contributions for the employee-beneficiary or employee-beneficiary with dependent-beneficiaries upon the death of the employee, as defined in paragraph (1)(D) of the definition of "employee" in section 87A-1[[].[]] If two employee-beneficiaries are married or in a civil union, the total contribution by the State or county shall not exceed the monthly contribution for two supplemental medicare self or non-medicare self plans, as appropriate. (d) Notwithstanding any other law to the contrary, for the purposes of county contributions to the fund for any employee who is a county police officer hired after June 30, 2001, and who retired, section 87A-35 shall apply, and with respect to benefit plans under this chapter, the county police officer employee shall be treated as if employment began before July 1, 2001, for the purposes of maintaining a spouse on a health benefit plan." SECTION 2. Section 88-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows: "(d) A retirant may be employed without reenrollment in the system and suffer no loss or interruption of benefits provided by the system or under chapter 87A if the retirant is employed: (1) As an elective officer pursuant to section 88-42.6(c) or as a member of the legislature pursuant to section [88-73(d);] 88-73(e); (2) As a juror or precinct official; (3) As a part-time or temporary employee excluded from membership in the system pursuant to section 88-43, as a session employee excluded from membership in the system pursuant to section 88-54.2, as the president and chief executive officer of the Hawaii tourism authority excluded from membership in the system pursuant to section 201B-2, or as any other employee expressly excluded by law from membership in the system; provided that: (A) The retirant was not employed by the State or a county during the six calendar months prior to the first day of reemployment; and (B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement; (4) In a position identified by the appropriate jurisdiction as a labor shortage or difficult-to-fill position; provided that: (A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment; (B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement; and (C) Each employer shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability; or (5) As a teacher or an administrator in a teacher shortage area identified by the department of education or in a charter school or as a mentor for new classroom teachers; provided that: (A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment; (B) No agreement was entered into between the State or a county and the retirant prior to the retirement of the retirant, for the return to work by the retirant after retirement; and (C) The department of education or charter school shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability." SECTION 3. Section 88-21.5, Hawaii Revised Statutes, is amended to read as follows: "§88‑21.5 Compensation. (a) For a member who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, unless a different meaning is plainly required by context, as used in this part, "compensation" means: (1) Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed; (2) Overtime, differentials, and supplementary payments; (3) Bonuses and lump sum salary supplements; and (4) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended. Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one‑twelfth of compensation for the twelve months prior to the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned: (1) During the period agreed‑upon by the employer and employee, but in any event over a period of not less than twelve months; or (2) In the absence of an agreement between the employer and the employee, over the twelve months prior to the date on which the bonus or lump sum salary supplement is payable. (b) For a member who becomes a member after June 30, 2012, except for a police officer who becomes a member after June 30, 2023, unless a different meaning is plainly required by context, "compensation" as used in this part: (1) Means: (A) The normal periodic payments of money for service, the right to which accrues on an hourly, daily, monthly, or annual basis; (B) Shortage differentials; (C) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; and (D) Twelve-month differentials for employees of the department of education; and (2) Shall not include any other additional or extra payments to an employee or officer, including overtime, supplementary payments, bonuses, lump sum salary supplements, allowances, or differentials, including differentials for stand-by duty, temporary unusual work hazards, compression differentials, or temporary differentials, except for those expressly authorized pursuant to subsection (b)(1)(B), (b)(1)(C), and (b)(1)(D)." SECTION 4. Section 88-42.6, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows: "(c) Notwithstanding section 88-21, 88-98, 88-273(c), or 88-344, or any other law to the contrary, the retirement allowance of a retirant who returns to service as an elective officer shall not be suspended if the retirant: (1) Retired pursuant to section [88-73(d);] 88-73(e); or (2) Has been retired for at least twelve consecutive months prior to return to service and elects to have the retirement allowance continue. The election whether or not to have the retirant's retirement allowance continue shall be irrevocable and shall be made no later than thirty days following the retirant's first return to service as an elective officer. If the retirant's retirement allowance is not suspended, the retirant shall not become a member of the system and shall not earn additional service credit or gain any additional retirement benefits. (d) An elective officer who retired pursuant to section [88-73(d)] 88-73(e) shall not be eligible for membership in the system while serving as an elective officer." SECTION 5. Section 88-45, Hawaii Revised Statutes, is amended to read as follows: "§88-45 Employee contributions. After June 30, 1988, each class A and class B member shall contribute seven and eight-tenths per cent of the member's compensation to the annuity savings fund; provided that after June 30, 1989, all firefighters, police officers, corrections officers, investigators of the departments of the prosecuting attorney and of the attorney general, narcotics enforcement investigators, water safety officers not making the election under section 88-271, and public safety investigations staff investigators shall contribute twelve and two-tenths per cent of their compensation to the annuity savings fund for service in that capacity; provided further that each class A and class B member who becomes a member after June 30, 2012, shall contribute nine and eight-tenths per cent of the member's compensation to the annuity savings fund; provided further that all firefighters, police officers, corrections officers, investigators of the departments of the prosecuting attorney and of the attorney general, narcotics enforcement investigators, and public safety investigations staff investigators who become members after June 30, 2012, shall contribute fourteen and two‑tenths per cent of their compensation to the annuity savings fund for service in that capacity[.]; provided further that police officers who become members after June 30, 2023, shall contribute twelve and two-tenths percent of their compensation to the annuity savings fund for service in that capacity." SECTION 6. Section 88-62, Hawaii Revised Statutes, is amended to read as follows: "§88-62 Return to service of a former member. (a) For members who became members before July 1, 2012[:], or for a police officer who becomes a member after June 30, 2023: (1) If a former member who has fewer than five years of credited service and who has been out of service for a period of four full calendar years or more after the year in which the former member left service, or if a former member who withdrew the former member's accumulated contributions returns to service, the former member shall become a member in the same manner and under the same conditions as anyone first entering service; however, the former member may obtain membership service credit in the manner provided by applicable law for credited service that was forfeited by the member upon termination of the member's previous membership. If the member did not withdraw the former member's accumulated contributions prior to the former member's return to service, the accumulated contributions shall be returned to the member as part of the process of enrolling the member in the system if the member's accumulated contributions are $1,000 or less at the time of distribution. If the accumulated contributions for the service the member had when the member previously terminated employment are greater than $1,000 and the member does not make written application, prior to or contemporaneously with the member's return to service, for return of the accumulated contributions, the member may not withdraw the member's accumulated contributions, except as provided by section 88-96 or 88-341, until the member retires or attains age sixty-two. The member shall not be entitled to service credit by reason of the system's retention of the member's accumulated contributions for the service the member had when the member previously terminated employment. To be eligible for any benefit, the member shall fulfill the membership service requirements for the benefit through membership service after again becoming a member, in addition to meeting any other eligibility requirement established for the benefit; provided that the membership service requirement shall be exclusive of any former service acquired in accordance with section 88-59 or any other section in part II, VII, or VIII; (2) If a former member with fewer than five years of credited service and who did not withdraw the former member's accumulated contributions returns to service within four full calendar years after the year in which the former member left service, the former member shall again become a member in the same manner and under the same conditions as anyone first entering service, except that the member shall be credited with service credit for the service the member had when the member terminated employment and: (A) If the member returns to service as a class A or class B member, the member's new and previous accumulated contributions shall be combined; or (B) If the member returns to service after June 30, 2006, as a class H member, section 88-321(b) shall apply; and (3) If a former member with five or more years of credited service who did not withdraw the former member's contributions returns to service, the former member's status shall be in accordance with the provisions described in section 88-97. (b) For members who become members after June 30, 2012[:], except police officers who become members after June 30, 2023: (1) If a former member who has fewer than ten years of credited service and who has been out of service for a period of four full calendar years or more after the year in which the former member left service, or if a former member who withdrew the former member's accumulated contributions returns to service, the former member shall become a member in the same manner and under the same conditions as anyone first entering service; however, the former member may obtain membership service credit in the manner provided by applicable law for credited service that was forfeited by the member upon termination of the member's previous membership. If the member did not withdraw the former member's accumulated contributions prior to the former member's return to service, the accumulated contributions shall be returned to the member as part of the process of enrolling the member in the system if the member's accumulated contributions are $1,000 or less at the time of distribution. If the accumulated contributions for the service the member had when the member previously terminated employment are greater than $1,000 and the member does not make written application, prior to or contemporaneously with the member's return to service, for return of the accumulated contributions, the member may not withdraw the member's accumulated contributions, except as provided by section 88-96 or 88-341, until the member retires or attains age sixty-two. The member shall not be entitled to service credit by reason of the system's retention of the member's accumulated contributions for the service the member had when the member previously terminated employment. To be eligible for any benefit, the member shall fulfill the membership service requirements for the benefit through membership service after again becoming a member, in addition to meeting any other eligibility requirement established for the benefit; provided that the membership service requirement shall be exclusive of any former service acquired in accordance with section 88-59 or any other section in part II, VII, or VIII; (2) If a former member with fewer than ten years of credited service and who did not withdraw the former member's accumulated contributions returns to service within four full calendar years after the year in which the former member left service, the former member shall again become a member in the same manner and under the same conditions as anyone first entering service, except that the member shall be credited with service credit for the service the member had when the member terminated employment: (A) If the member returns to service as a class A or class B member, the member's new and previous accumulated contributions shall be combined; or (B) If the member returns to service as a class H member, section 88-321(b) shall apply; and (3) If a former member with ten or more years of credited service who did not withdraw the former member's contributions returns to service, the former member's status shall be in accordance with the provisions described in section 88-97." SECTION 7. Section 88-73, Hawaii Revised Statutes, is amended to read as follows: "§88-73 Service retirement. (a) Any member who: (1) Became a member before July 1, 2012, and has at least five years of credited service and has attained age fifty-five; (2) Became a member before July 1, 2012, and has at least twenty-five years of credited service; (3) Has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer; (4) Becomes a member after June 30, 2012, and has at least ten years of credited service and has attained age sixty; or (5) Becomes a member after June 30, 2012, and has at least twenty-five years of credited service and has attained age fifty-five, shall become eligible to receive a retirement allowance after the member has terminated service[.]; provided that county police officers shall become eligible to receive a retirement allowance pursuant to section 88-74(i). (b) Notwithstanding subsection (a), any police officer who becomes a member after June 30, 2023, and who: (1) Has at least five years of credited service as a police officer and has attained age fifty-five; (2) Has at least twenty-five years of credited service as a police officer; or (3) Has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer, shall become eligible to receive a retirement allowance after the member has terminated service. [(b)] (c) Any member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, and who has at least five years of credited service and has attained age fifty-five or has at least twenty-five years of credited service shall become eligible to receive a retirement allowance after the member has terminated service. Any member who first earned credited service as a judge after June 30, 2012, and has at least ten years of credited service and has attained age sixty or has at least twenty-five years of credited service and has attained age fifty-five shall be eligible to receive a retirement allowance after the member has terminated service. [(c)] (d) A member may retire upon the written application specifying the date of retirement, which shall not be less than thirty days nor more than one hundred fifty days subsequent to the date of filing. Retirement shall be effective on the first day of a month, except for the month of December when retirement on the first or last day of the month shall be allowed. [(d)] (e) Any member of the legislature who attains age sixty-five may retire and receive a service retirement allowance although the member continues to fill the elective position. [(e)] (f) In the case of a class A or B member who also has prior credited service under part VII or part VIII, total credited service as a class A, class B, class C, and class H member shall be used to determine the eligibility for retirement allowance. [(f)] (g) A member's right to the member's accrued retirement benefit is nonforfeitable upon the attainment of normal retirement age and the completion of the requisite years of credited service. For the purpose of this subsection: "Normal retirement age" means age sixty-five. "Requisite years of credited service" means five years for class A and B members who became members before July 1, 2012, and police officers who become members after June 30, 2023, and ten years for class A and B members who became members after June 30, 2012." SECTION 8. Section 88-74, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (b) to read: "(b) If a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has attained age fifty-five, the member's maximum retirement allowance shall be two per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and class B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of two per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that: (1) After June 30, 1968, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney; (2) After June 30, 1977, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer; (3) After June 16, 1981, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general; (4) After June 30, 1989, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator; (5) After December 31, 1993, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a water safety officer; (6) After June 30, 1994, if the member has at least ten years of credited service, of which the last five or more years prior to retirement are credited service as a public safety investigations staff investigator; (7) After June 30, 2002, if the member: (A) Has at least ten years of credited service as a firefighter; (B) Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and (C) Continues employment in a class A or B position other than a firefighter; and (8) After June 30, 2004, if the member: (A) Has at least ten years of credited service as a police officer; (B) Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and (C) Continues employment in a class A or B position other than a police officer; then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, water safety officer, or public safety investigations staff investigator, the retirement allowance shall be two and one-half per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced for age as provided in subsection (e)." 2. By amending subsections (e) and (f) to read: "(e) Except as provided in subsections (b), (c), and (d), if a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has not attained age fifty-five at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below age fifty-five, as follows: (1) 0.4166 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus (2) 0.3333 per cent for each month below age fifty and above age forty-four and eleven months; plus (3) 0.2500 per cent for each month below age forty-five and above age thirty-nine and eleven months; plus (4) 0.1666 per cent for each month below age forty; provided that no reduction shall be made if the member has at least twenty-five years of credited service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, or water safety officer, of which the last five or more years prior to retirement is credited service in these capacities. (f) If a member, who becomes a member after June 30, 2012, except a police officer who becomes a member after June 30, 2023, has attained age sixty, the member's maximum retirement allowance shall be one and three-fourths per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and class B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of one and three-fourths per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that: (1) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney; (2) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer; (3) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general; (4) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator; (5) If the member has at least ten years of credited service, of which the last five or more years prior to retirement is credited service as a public safety investigations staff investigator; (6) If the member: (A) Has at least ten years of credited service as a firefighter; (B) Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and (C) Continues employment in a class A or class B position other than a firefighter; and (7) If the member: (A) Has at least ten years of credited service as a police officer; (B) Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and (C) Continues employment in a class A or class B position other than a police officer, then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, or public safety investigations staff investigator, the retirement allowance shall be two and one-fourth per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age sixty, the member's retirement allowance shall be computed as though the member had attained age sixty, reduced for age as provided in subsection (i)." 3. By amending subsection (i) to read: "(i) Except as provided in subsections (f), (g), and (h), if a member, who becomes a member after June 30, 2012, except a police officer who becomes a member after June 30, 2023, has not attained age sixty at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below age sixty, as follows: (1) 0.4166 per cent for each month below age sixty and above age fifty-four and eleven months; plus (2) 0.3333 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus (3) 0.2500 per cent for each month below age fifty and above age forty-four and eleven months; plus (4) 0.1666 per cent for each month below age forty-five; provided that no reduction shall be made if the member has attained the age of fifty-five and has at least twenty-five years of credited service as a firefighter, [police officer,] corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, water safety officer, or emergency medical technician, of which the last five or more years prior to retirement is credited service in these capacities[.]; provided further that no reduction shall be made if the member has at least twenty-five years of credited service as a county police officer regardless of whether the member has not attained the age of fifty-five." SECTION 9. Section 88-74.6, Hawaii Revised Statutes, is amended to read as follows: "§88-74.6 Unreduced allowance on service retirement; when applicable. In addition to those positions identified in section 88-74(e) and notwithstanding any law in this part that requires a member to attain age fifty-five to qualify for an unreduced service retirement allowance, if a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has at least: (1) Thirty years of credited service through June 30, 2003; (2) Twenty-nine years of credited service on or after July 1, 2004; (3) Twenty-eight years of credited service on or after July 1, 2005; (4) Twenty-seven years of credited service on or after July 1, 2006; (5) Twenty-six years of credited service on or after July 1, 2007; or (6) Twenty-five years of credited service on or after July 1, 2008, as an emergency medical technician, of which the last five or more years prior to retirement is credited service in that capacity, then upon retirement and irrespective of age, that member's service retirement allowance shall not be reduced for actuarial purposes." SECTION 10. Section 88-74.8, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows: "(f) This section shall not apply to accrued retirement benefits that are non-forfeitable pursuant to sections [88-73(f),] 88-73(g), 88-281(g), and 88-331(f)." SECTION 11. Section 88-81, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows: "(b) The average final compensation of members shall be calculated as follows: (1) For employees who become members before January 1, 1971: (A) During the member's five highest paid years of credited service, including vacation pay, or the three highest paid years of credited service excluding vacation pay, whichever is greater; or (B) If the member has fewer than three years of credited service, during the member's actual years of credited service; (2) For employees who become members after December 31, 1970, but before July 1, 2012: (A) During the member's three highest paid years of credited service, excluding vacation pay; or (B) If the member has fewer than three years of credited service, during the member's actual years of credited service; [and] (3) For employees, except police officers as set forth in paragraph (4), who become members after June 30, 2012: (A) During the member's five highest paid years of credited service, excluding vacation pay; or (B) If the member has fewer than five years of credited service, during the member's actual years of credited service[.]; and (4) For police officers who become members after June 30, 2023; (A) During the member's three highest paid years of credited service, excluding vacation pay; or (B) If the member has fewer than three years of credited service, during the member's actual years of credited service." SECTION 12. Section 88-90, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows: "(c) Notwithstanding subsections (a) and (b), for employees who become members after June 30, 2012, and for any person who receives a monthly pension, annuity or retirement allowance as a beneficiary or survivor of the employee, the post retirement allowance shall consist of an amount equivalent to one and one-half per cent of the monthly pension, annuity, or retirement allowance as originally computed and paid. Payment of the benefit shall commence on the first day of July following the calendar year in which the payment of the pension, annuity or retirement allowance is effective. This subsection shall not apply to police officers who become members after June 30, 2023." SECTION 13. Section 88-96, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows: "(a) Any member who ceases to be an employee and who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, and has fewer than five years of credited service, excluding unused sick leave, or who becomes a member after June 30, 2012, and has fewer than ten years of credited service, excluding sick leave, shall, upon application to the board, be paid all of the member's accumulated contributions and the member's membership shall thereupon terminate and all credited service shall be forfeited; provided that a member shall not be paid the member's accumulated contributions: (1) If the member becomes an employee again within fifteen calendar days from the date the member ceased to be an employee; or (2) If, at the time the application for return of accumulated contributions is received by the board, the member has become an employee again. Regular interest shall be credited to the former employee's account until the former employee's accumulated contributions are returned to the former employee; provided that the former employee's membership shall not continue after the fourth full year following the calendar year in which the individual's employment terminates. Upon termination of the former employee's membership, the former employee's credited service shall be forfeited and, if the former employee's accumulated contributions are $1,000 or less at the time of distribution, the system shall return the former employee's contributions to the former employee. If the former employee does not become an employee again and if the former employee's accumulated contributions have not been withdrawn by the former employee or previously returned by the system to the former employee, the system shall return the former employee's accumulated contributions to the former employee as soon as possible after the later of: (A) the former employee attaining age sixty-two; or (B) the termination of the former employee's membership. (b) Any member who ceases to be an employee and who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, and has more than five years of credited service, excluding unused sick leave, or who becomes a member after June 30, 2012, and has more than ten years of credited service, excluding sick leave, shall, upon application to the board, be paid all of the member's accumulated contributions and thereupon the former employee's membership shall terminate and all credited service shall be forfeited; provided that a member shall not be paid the member's accumulated contributions: (1) If the member becomes an employee again within fifteen calendar days from the date the member ceased to be an employee; or (2) If, at the time the application for return of accumulated contributions is received by the board, the member has become an employee again. If the contributions are not withdrawn by the former employee within four calendar years following the calendar year in which the former employee's employment terminates, the former employee shall have established vested benefit status and shall be eligible for the service retirement benefit in effect at the time of the former employee's retirement, payable in accordance with this chapter; provided that if the former employee withdraws the former employee's accumulated contributions, the former employee's vested benefit status shall terminate and all credited service shall be forfeited." SECTION 14. Section 88-311, Hawaii Revised Statutes, is amended by amending the definition of "hypothetical account balance" to read as follows: ""Hypothetical account balance" means: (1) For members who became members before July 1, 2012, or police officers who became members after June 30, 2023, the sum of: (A) One and one-half times the sum of: (i) Employee contributions made, either by the member or on behalf of the member, pursuant to section 88-325; (ii) Accumulated interest at the regular interest rate on the employee contributions; and (B) Any employee contributions, including rollovers and contributions used to convert credited service to class H credited service, or used to purchase service, and accumulated interest on the employee contributions at the regular interest rate; or (2) For members who become members after June 30, 2012, the sum of: (A) One and one-fifth times the sum of: (i) Employee contributions made, either by the member or on behalf of the member, pursuant to section 88-325; and (ii) Accumulated interest at the regular interest rate on the employee contributions; and (B) Any employee contributions, including rollovers and contributions used to convert credited service to class H credited service, or used to purchase service, and accumulated interest on the employee contributions at the regular interest rate." SECTION 15. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 16. This Act shall take effect on July 1, 2023; provided that the amendments made to sections 88-45 and 88-74, Hawaii Revised Statutes, by sections 5 and 8 of this Act, respectively, shall not be repealed when those sections are amended on January 1, 2024, by section 17(d) of Act 278, Session Laws of Hawaii 2022. INTRODUCED BY: _____________________________
4848
4949 SECTION 1. Section 87A-36, Hawaii Revised Statutes, is amended to read as follows:
5050
5151 "§87A-36 State and county contributions; employees hired after June 30, 2001, and retired. (a) This section shall apply to state and county contributions to the fund for employees hired after June 30, 2001, and who retired, except that this section shall not apply to the following employees, for whom state and county contributions shall be made as provided by section 87A-35:
5252
5353 (1) An employee hired after June 30, 1996, and prior to July 1, 2001, who transfers employment after June 30, 2001, and who cumulatively accrues at least ten years of credited service; and
5454
5555 (2) An employee hired after June 30, 1996, and prior to July 1, 2001, who has at least ten years of credited service prior to a break in service.
5656
5757 For purposes of this section:
5858
5959 "Break in service" means to leave state or county employment for more than ninety calendar days before returning to state or county employment.
6060
6161 "Transfer" means to leave state or county employment and return to state or county employment within ninety calendar days.
6262
6363 (b) For purposes of this section, if an employee leaves state or county employment and returns to state or county employment after July 1, 2001, upon retirement, the employee's years of service shall be computed in the same manner as set forth in chapter 88.
6464
6565 (c) The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund:
6666
6767 (1) For retired employees based on the self plan with ten or more years but fewer than fifteen years of service, a monthly contribution equal to one-half of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b);
6868
6969 (2) For retired employees based on the self plan with at least fifteen but fewer than twenty-five years of service, a monthly contribution equal to seventy-five per cent of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b);
7070
7171 (3) For retired employees based on the self plan with twenty-five or more years of service, a monthly contribution equal to one hundred per cent of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b); and
7272
7373 (4) One-half of the monthly contributions for the employee-beneficiary or employee-beneficiary with dependent-beneficiaries upon the death of the employee, as defined in paragraph (1)(D) of the definition of "employee" in section 87A-1[[].[]]
7474
7575 If two employee-beneficiaries are married or in a civil union, the total contribution by the State or county shall not exceed the monthly contribution for two supplemental medicare self or non-medicare self plans, as appropriate.
7676
7777 (d) Notwithstanding any other law to the contrary, for the purposes of county contributions to the fund for any employee who is a county police officer hired after June 30, 2001, and who retired, section 87A-35 shall apply, and with respect to benefit plans under this chapter, the county police officer employee shall be treated as if employment began before July 1, 2001, for the purposes of maintaining a spouse on a health benefit plan."
7878
7979 SECTION 2. Section 88-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
8080
8181 "(d) A retirant may be employed without reenrollment in the system and suffer no loss or interruption of benefits provided by the system or under chapter 87A if the retirant is employed:
8282
8383 (1) As an elective officer pursuant to section 88-42.6(c) or as a member of the legislature pursuant to section [88-73(d);] 88-73(e);
8484
8585 (2) As a juror or precinct official;
8686
8787 (3) As a part-time or temporary employee excluded from membership in the system pursuant to section 88-43, as a session employee excluded from membership in the system pursuant to section 88-54.2, as the president and chief executive officer of the Hawaii tourism authority excluded from membership in the system pursuant to section 201B-2, or as any other employee expressly excluded by law from membership in the system; provided that:
8888
8989 (A) The retirant was not employed by the State or a county during the six calendar months prior to the first day of reemployment; and
9090
9191 (B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement;
9292
9393 (4) In a position identified by the appropriate jurisdiction as a labor shortage or difficult-to-fill position; provided that:
9494
9595 (A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment;
9696
9797 (B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement; and
9898
9999 (C) Each employer shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability; or
100100
101101 (5) As a teacher or an administrator in a teacher shortage area identified by the department of education or in a charter school or as a mentor for new classroom teachers; provided that:
102102
103103 (A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment;
104104
105105 (B) No agreement was entered into between the State or a county and the retirant prior to the retirement of the retirant, for the return to work by the retirant after retirement; and
106106
107107 (C) The department of education or charter school shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability."
108108
109109 SECTION 3. Section 88-21.5, Hawaii Revised Statutes, is amended to read as follows:
110110
111111 "§88‑21.5 Compensation. (a) For a member who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, unless a different meaning is plainly required by context, as used in this part, "compensation" means:
112112
113113 (1) Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed;
114114
115115 (2) Overtime, differentials, and supplementary payments;
116116
117117 (3) Bonuses and lump sum salary supplements; and
118118
119119 (4) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended.
120120
121121 Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one‑twelfth of compensation for the twelve months prior to the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned:
122122
123123 (1) During the period agreed‑upon by the employer and employee, but in any event over a period of not less than twelve months; or
124124
125125 (2) In the absence of an agreement between the employer and the employee, over the twelve months prior to the date on which the bonus or lump sum salary supplement is payable.
126126
127127 (b) For a member who becomes a member after June 30, 2012, except for a police officer who becomes a member after June 30, 2023, unless a different meaning is plainly required by context, "compensation" as used in this part:
128128
129129 (1) Means:
130130
131131 (A) The normal periodic payments of money for service, the right to which accrues on an hourly, daily, monthly, or annual basis;
132132
133133 (B) Shortage differentials;
134134
135135 (C) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; and
136136
137137 (D) Twelve-month differentials for employees of the department of education; and
138138
139139 (2) Shall not include any other additional or extra payments to an employee or officer, including overtime, supplementary payments, bonuses, lump sum salary supplements, allowances, or differentials, including differentials for stand-by duty, temporary unusual work hazards, compression differentials, or temporary differentials, except for those expressly authorized pursuant to subsection (b)(1)(B), (b)(1)(C), and (b)(1)(D)."
140140
141141 SECTION 4. Section 88-42.6, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:
142142
143143 "(c) Notwithstanding section 88-21, 88-98, 88-273(c), or 88-344, or any other law to the contrary, the retirement allowance of a retirant who returns to service as an elective officer shall not be suspended if the retirant:
144144
145145 (1) Retired pursuant to section [88-73(d);] 88-73(e); or
146146
147147 (2) Has been retired for at least twelve consecutive months prior to return to service and elects to have the retirement allowance continue. The election whether or not to have the retirant's retirement allowance continue shall be irrevocable and shall be made no later than thirty days following the retirant's first return to service as an elective officer.
148148
149149 If the retirant's retirement allowance is not suspended, the retirant shall not become a member of the system and shall not earn additional service credit or gain any additional retirement benefits.
150150
151151 (d) An elective officer who retired pursuant to section [88-73(d)] 88-73(e) shall not be eligible for membership in the system while serving as an elective officer."
152152
153153 SECTION 5. Section 88-45, Hawaii Revised Statutes, is amended to read as follows:
154154
155155 "§88-45 Employee contributions. After June 30, 1988, each class A and class B member shall contribute seven and eight-tenths per cent of the member's compensation to the annuity savings fund; provided that after June 30, 1989, all firefighters, police officers, corrections officers, investigators of the departments of the prosecuting attorney and of the attorney general, narcotics enforcement investigators, water safety officers not making the election under section 88-271, and public safety investigations staff investigators shall contribute twelve and two-tenths per cent of their compensation to the annuity savings fund for service in that capacity; provided further that each class A and class B member who becomes a member after June 30, 2012, shall contribute nine and eight-tenths per cent of the member's compensation to the annuity savings fund; provided further that all firefighters, police officers, corrections officers, investigators of the departments of the prosecuting attorney and of the attorney general, narcotics enforcement investigators, and public safety investigations staff investigators who become members after June 30, 2012, shall contribute fourteen and two‑tenths per cent of their compensation to the annuity savings fund for service in that capacity[.]; provided further that police officers who become members after June 30, 2023, shall contribute twelve and two-tenths percent of their compensation to the annuity savings fund for service in that capacity."
156156
157157 SECTION 6. Section 88-62, Hawaii Revised Statutes, is amended to read as follows:
158158
159159 "§88-62 Return to service of a former member. (a) For members who became members before July 1, 2012[:], or for a police officer who becomes a member after June 30, 2023:
160160
161161 (1) If a former member who has fewer than five years of credited service and who has been out of service for a period of four full calendar years or more after the year in which the former member left service, or if a former member who withdrew the former member's accumulated contributions returns to service, the former member shall become a member in the same manner and under the same conditions as anyone first entering service; however, the former member may obtain membership service credit in the manner provided by applicable law for credited service that was forfeited by the member upon termination of the member's previous membership. If the member did not withdraw the former member's accumulated contributions prior to the former member's return to service, the accumulated contributions shall be returned to the member as part of the process of enrolling the member in the system if the member's accumulated contributions are $1,000 or less at the time of distribution. If the accumulated contributions for the service the member had when the member previously terminated employment are greater than $1,000 and the member does not make written application, prior to or contemporaneously with the member's return to service, for return of the accumulated contributions, the member may not withdraw the member's accumulated contributions, except as provided by section 88-96 or 88-341, until the member retires or attains age sixty-two. The member shall not be entitled to service credit by reason of the system's retention of the member's accumulated contributions for the service the member had when the member previously terminated employment.
162162
163163 To be eligible for any benefit, the member shall fulfill the membership service requirements for the benefit through membership service after again becoming a member, in addition to meeting any other eligibility requirement established for the benefit; provided that the membership service requirement shall be exclusive of any former service acquired in accordance with section 88-59 or any other section in part II, VII, or VIII;
164164
165165 (2) If a former member with fewer than five years of credited service and who did not withdraw the former member's accumulated contributions returns to service within four full calendar years after the year in which the former member left service, the former member shall again become a member in the same manner and under the same conditions as anyone first entering service, except that the member shall be credited with service credit for the service the member had when the member terminated employment and:
166166
167167 (A) If the member returns to service as a class A or class B member, the member's new and previous accumulated contributions shall be combined; or
168168
169169 (B) If the member returns to service after June 30, 2006, as a class H member, section 88-321(b) shall apply; and
170170
171171 (3) If a former member with five or more years of credited service who did not withdraw the former member's contributions returns to service, the former member's status shall be in accordance with the provisions described in section 88-97.
172172
173173 (b) For members who become members after June 30, 2012[:], except police officers who become members after June 30, 2023:
174174
175175 (1) If a former member who has fewer than ten years of credited service and who has been out of service for a period of four full calendar years or more after the year in which the former member left service, or if a former member who withdrew the former member's accumulated contributions returns to service, the former member shall become a member in the same manner and under the same conditions as anyone first entering service; however, the former member may obtain membership service credit in the manner provided by applicable law for credited service that was forfeited by the member upon termination of the member's previous membership. If the member did not withdraw the former member's accumulated contributions prior to the former member's return to service, the accumulated contributions shall be returned to the member as part of the process of enrolling the member in the system if the member's accumulated contributions are $1,000 or less at the time of distribution. If the accumulated contributions for the service the member had when the member previously terminated employment are greater than $1,000 and the member does not make written application, prior to or contemporaneously with the member's return to service, for return of the accumulated contributions, the member may not withdraw the member's accumulated contributions, except as provided by section 88-96 or 88-341, until the member retires or attains age sixty-two. The member shall not be entitled to service credit by reason of the system's retention of the member's accumulated contributions for the service the member had when the member previously terminated employment. To be eligible for any benefit, the member shall fulfill the membership service requirements for the benefit through membership service after again becoming a member, in addition to meeting any other eligibility requirement established for the benefit; provided that the membership service requirement shall be exclusive of any former service acquired in accordance with section 88-59 or any other section in part II, VII, or VIII;
176176
177177 (2) If a former member with fewer than ten years of credited service and who did not withdraw the former member's accumulated contributions returns to service within four full calendar years after the year in which the former member left service, the former member shall again become a member in the same manner and under the same conditions as anyone first entering service, except that the member shall be credited with service credit for the service the member had when the member terminated employment:
178178
179179 (A) If the member returns to service as a class A or class B member, the member's new and previous accumulated contributions shall be combined; or
180180
181181 (B) If the member returns to service as a class H member, section 88-321(b) shall apply; and
182182
183183 (3) If a former member with ten or more years of credited service who did not withdraw the former member's contributions returns to service, the former member's status shall be in accordance with the provisions described in section 88-97."
184184
185185 SECTION 7. Section 88-73, Hawaii Revised Statutes, is amended to read as follows:
186186
187187 "§88-73 Service retirement. (a) Any member who:
188188
189189 (1) Became a member before July 1, 2012, and has at least five years of credited service and has attained age fifty-five;
190190
191191 (2) Became a member before July 1, 2012, and has at least twenty-five years of credited service;
192192
193193 (3) Has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer;
194194
195195 (4) Becomes a member after June 30, 2012, and has at least ten years of credited service and has attained age sixty; or
196196
197197 (5) Becomes a member after June 30, 2012, and has at least twenty-five years of credited service and has attained age fifty-five,
198198
199199 shall become eligible to receive a retirement allowance after the member has terminated service[.]; provided that county police officers shall become eligible to receive a retirement allowance pursuant to section 88-74(i).
200200
201201 (b) Notwithstanding subsection (a), any police officer who becomes a member after June 30, 2023, and who:
202202
203203 (1) Has at least five years of credited service as a police officer and has attained age fifty-five;
204204
205205 (2) Has at least twenty-five years of credited service as a police officer; or
206206
207207 (3) Has at least ten years of credited service, which includes service as a judge before July 1, 1999, an elective officer, or a legislative officer,
208208
209209 shall become eligible to receive a retirement allowance after the member has terminated service.
210210
211211 [(b)] (c) Any member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, and who has at least five years of credited service and has attained age fifty-five or has at least twenty-five years of credited service shall become eligible to receive a retirement allowance after the member has terminated service. Any member who first earned credited service as a judge after June 30, 2012, and has at least ten years of credited service and has attained age sixty or has at least twenty-five years of credited service and has attained age fifty-five shall be eligible to receive a retirement allowance after the member has terminated service.
212212
213213 [(c)] (d) A member may retire upon the written application specifying the date of retirement, which shall not be less than thirty days nor more than one hundred fifty days subsequent to the date of filing. Retirement shall be effective on the first day of a month, except for the month of December when retirement on the first or last day of the month shall be allowed.
214214
215215 [(d)] (e) Any member of the legislature who attains age sixty-five may retire and receive a service retirement allowance although the member continues to fill the elective position.
216216
217217 [(e)] (f) In the case of a class A or B member who also has prior credited service under part VII or part VIII, total credited service as a class A, class B, class C, and class H member shall be used to determine the eligibility for retirement allowance.
218218
219219 [(f)] (g) A member's right to the member's accrued retirement benefit is nonforfeitable upon the attainment of normal retirement age and the completion of the requisite years of credited service.
220220
221221 For the purpose of this subsection:
222222
223223 "Normal retirement age" means age sixty-five.
224224
225225 "Requisite years of credited service" means five years for class A and B members who became members before July 1, 2012, and police officers who become members after June 30, 2023, and ten years for class A and B members who became members after June 30, 2012."
226226
227227 SECTION 8. Section 88-74, Hawaii Revised Statutes, is amended as follows:
228228
229229 1. By amending subsection (b) to read:
230230
231231 "(b) If a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has attained age fifty-five, the member's maximum retirement allowance shall be two per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and class B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of two per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that:
232232
233233 (1) After June 30, 1968, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney;
234234
235235 (2) After June 30, 1977, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer;
236236
237237 (3) After June 16, 1981, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general;
238238
239239 (4) After June 30, 1989, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator;
240240
241241 (5) After December 31, 1993, if the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a water safety officer;
242242
243243 (6) After June 30, 1994, if the member has at least ten years of credited service, of which the last five or more years prior to retirement are credited service as a public safety investigations staff investigator;
244244
245245 (7) After June 30, 2002, if the member:
246246
247247 (A) Has at least ten years of credited service as a firefighter;
248248
249249 (B) Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and
250250
251251 (C) Continues employment in a class A or B position other than a firefighter; and
252252
253253 (8) After June 30, 2004, if the member:
254254
255255 (A) Has at least ten years of credited service as a police officer;
256256
257257 (B) Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and
258258
259259 (C) Continues employment in a class A or B position other than a police officer;
260260
261261 then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, water safety officer, or public safety investigations staff investigator, the retirement allowance shall be two and one-half per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age fifty-five, the member's retirement allowance shall be computed as though the member had attained age fifty-five, reduced for age as provided in subsection (e)."
262262
263263 2. By amending subsections (e) and (f) to read:
264264
265265 "(e) Except as provided in subsections (b), (c), and (d), if a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has not attained age fifty-five at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below age fifty-five, as follows:
266266
267267 (1) 0.4166 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus
268268
269269 (2) 0.3333 per cent for each month below age fifty and above age forty-four and eleven months; plus
270270
271271 (3) 0.2500 per cent for each month below age forty-five and above age thirty-nine and eleven months; plus
272272
273273 (4) 0.1666 per cent for each month below age forty;
274274
275275 provided that no reduction shall be made if the member has at least twenty-five years of credited service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, or water safety officer, of which the last five or more years prior to retirement is credited service in these capacities.
276276
277277 (f) If a member, who becomes a member after June 30, 2012, except a police officer who becomes a member after June 30, 2023, has attained age sixty, the member's maximum retirement allowance shall be one and three-fourths per cent of the member's average final compensation multiplied by the total number of years of the member's credited service as a class A and class B member, excluding any credited service as a judge, elective officer, or legislative officer, plus a retirement allowance of one and one-fourth per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class C member, plus a retirement allowance of one and three-fourths per cent of the member's average final compensation multiplied by the total number of years of prior credited service as a class H member; provided that:
278278
279279 (1) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a firefighter, police officer, or an investigator of the department of the prosecuting attorney;
280280
281281 (2) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a corrections officer;
282282
283283 (3) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as an investigator of the department of the attorney general;
284284
285285 (4) If the member has at least ten years of credited service of which the last five or more years prior to retirement is credited service as a narcotics enforcement investigator;
286286
287287 (5) If the member has at least ten years of credited service, of which the last five or more years prior to retirement is credited service as a public safety investigations staff investigator;
288288
289289 (6) If the member:
290290
291291 (A) Has at least ten years of credited service as a firefighter;
292292
293293 (B) Is deemed permanently medically disqualified due to a service related disability to be a firefighter by the employer's physician; and
294294
295295 (C) Continues employment in a class A or class B position other than a firefighter; and
296296
297297 (7) If the member:
298298
299299 (A) Has at least ten years of credited service as a police officer;
300300
301301 (B) Is deemed permanently medically disqualified due to a service related disability to be a police officer by the employer's physician; and
302302
303303 (C) Continues employment in a class A or class B position other than a police officer,
304304
305305 then for each year of service as a firefighter, police officer, corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, or public safety investigations staff investigator, the retirement allowance shall be two and one-fourth per cent of the member's average final compensation. The maximum retirement allowance for those members shall not exceed eighty per cent of the member's average final compensation. If the member has not attained age sixty, the member's retirement allowance shall be computed as though the member had attained age sixty, reduced for age as provided in subsection (i)."
306306
307307 3. By amending subsection (i) to read:
308308
309309 "(i) Except as provided in subsections (f), (g), and (h), if a member, who becomes a member after June 30, 2012, except a police officer who becomes a member after June 30, 2023, has not attained age sixty at the date of retirement, the member's retirement allowance shall be reduced, for each month the member's age at the date of retirement is below age sixty, as follows:
310310
311311 (1) 0.4166 per cent for each month below age sixty and above age fifty-four and eleven months; plus
312312
313313 (2) 0.3333 per cent for each month below age fifty-five and above age forty-nine and eleven months; plus
314314
315315 (3) 0.2500 per cent for each month below age fifty and above age forty-four and eleven months; plus
316316
317317 (4) 0.1666 per cent for each month below age forty-five;
318318
319319 provided that no reduction shall be made if the member has attained the age of fifty-five and has at least twenty-five years of credited service as a firefighter, [police officer,] corrections officer, investigator of the department of the prosecuting attorney, investigator of the department of the attorney general, narcotics enforcement investigator, public safety investigations staff investigator, sewer worker, water safety officer, or emergency medical technician, of which the last five or more years prior to retirement is credited service in these capacities[.]; provided further that no reduction shall be made if the member has at least twenty-five years of credited service as a county police officer regardless of whether the member has not attained the age of fifty-five."
320320
321321 SECTION 9. Section 88-74.6, Hawaii Revised Statutes, is amended to read as follows:
322322
323323 "§88-74.6 Unreduced allowance on service retirement; when applicable. In addition to those positions identified in section 88-74(e) and notwithstanding any law in this part that requires a member to attain age fifty-five to qualify for an unreduced service retirement allowance, if a member, who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, has at least:
324324
325325 (1) Thirty years of credited service through June 30, 2003;
326326
327327 (2) Twenty-nine years of credited service on or after July 1, 2004;
328328
329329 (3) Twenty-eight years of credited service on or after July 1, 2005;
330330
331331 (4) Twenty-seven years of credited service on or after July 1, 2006;
332332
333333 (5) Twenty-six years of credited service on or after July 1, 2007; or
334334
335335 (6) Twenty-five years of credited service on or after July 1, 2008,
336336
337337 as an emergency medical technician, of which the last five or more years prior to retirement is credited service in that capacity, then upon retirement and irrespective of age, that member's service retirement allowance shall not be reduced for actuarial purposes."
338338
339339 SECTION 10. Section 88-74.8, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:
340340
341341 "(f) This section shall not apply to accrued retirement benefits that are non-forfeitable pursuant to sections [88-73(f),] 88-73(g), 88-281(g), and 88-331(f)."
342342
343343 SECTION 11. Section 88-81, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
344344
345345 "(b) The average final compensation of members shall be calculated as follows:
346346
347347 (1) For employees who become members before January 1, 1971:
348348
349349 (A) During the member's five highest paid years of credited service, including vacation pay, or the three highest paid years of credited service excluding vacation pay, whichever is greater; or
350350
351351 (B) If the member has fewer than three years of credited service, during the member's actual years of credited service;
352352
353353 (2) For employees who become members after December 31, 1970, but before July 1, 2012:
354354
355355 (A) During the member's three highest paid years of credited service, excluding vacation pay; or
356356
357357 (B) If the member has fewer than three years of credited service, during the member's actual years of credited service; [and]
358358
359359 (3) For employees, except police officers as set forth in paragraph (4), who become members after June 30, 2012:
360360
361361 (A) During the member's five highest paid years of credited service, excluding vacation pay; or
362362
363363 (B) If the member has fewer than five years of credited service, during the member's actual years of credited service[.]; and
364364
365365 (4) For police officers who become members after June 30, 2023;
366366
367367 (A) During the member's three highest paid years of credited service, excluding vacation pay; or
368368
369369 (B) If the member has fewer than three years of credited service, during the member's actual years of credited service."
370370
371371 SECTION 12. Section 88-90, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
372372
373373 "(c) Notwithstanding subsections (a) and (b), for employees who become members after June 30, 2012, and for any person who receives a monthly pension, annuity or retirement allowance as a beneficiary or survivor of the employee, the post retirement allowance shall consist of an amount equivalent to one and one-half per cent of the monthly pension, annuity, or retirement allowance as originally computed and paid. Payment of the benefit shall commence on the first day of July following the calendar year in which the payment of the pension, annuity or retirement allowance is effective. This subsection shall not apply to police officers who become members after June 30, 2023."
374374
375375 SECTION 13. Section 88-96, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
376376
377377 "(a) Any member who ceases to be an employee and who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, and has fewer than five years of credited service, excluding unused sick leave, or who becomes a member after June 30, 2012, and has fewer than ten years of credited service, excluding sick leave, shall, upon application to the board, be paid all of the member's accumulated contributions and the member's membership shall thereupon terminate and all credited service shall be forfeited; provided that a member shall not be paid the member's accumulated contributions:
378378
379379 (1) If the member becomes an employee again within fifteen calendar days from the date the member ceased to be an employee; or
380380
381381 (2) If, at the time the application for return of accumulated contributions is received by the board, the member has become an employee again.
382382
383383 Regular interest shall be credited to the former employee's account until the former employee's accumulated contributions are returned to the former employee; provided that the former employee's membership shall not continue after the fourth full year following the calendar year in which the individual's employment terminates. Upon termination of the former employee's membership, the former employee's credited service shall be forfeited and, if the former employee's accumulated contributions are $1,000 or less at the time of distribution, the system shall return the former employee's contributions to the former employee. If the former employee does not become an employee again and if the former employee's accumulated contributions have not been withdrawn by the former employee or previously returned by the system to the former employee, the system shall return the former employee's accumulated contributions to the former employee as soon as possible after the later of: (A) the former employee attaining age sixty-two; or (B) the termination of the former employee's membership.
384384
385385 (b) Any member who ceases to be an employee and who became a member before July 1, 2012, or who is a police officer who becomes a member after June 30, 2023, and has more than five years of credited service, excluding unused sick leave, or who becomes a member after June 30, 2012, and has more than ten years of credited service, excluding sick leave, shall, upon application to the board, be paid all of the member's accumulated contributions and thereupon the former employee's membership shall terminate and all credited service shall be forfeited; provided that a member shall not be paid the member's accumulated contributions:
386386
387387 (1) If the member becomes an employee again within fifteen calendar days from the date the member ceased to be an employee; or
388388
389389 (2) If, at the time the application for return of accumulated contributions is received by the board, the member has become an employee again.
390390
391391 If the contributions are not withdrawn by the former employee within four calendar years following the calendar year in which the former employee's employment terminates, the former employee shall have established vested benefit status and shall be eligible for the service retirement benefit in effect at the time of the former employee's retirement, payable in accordance with this chapter; provided that if the former employee withdraws the former employee's accumulated contributions, the former employee's vested benefit status shall terminate and all credited service shall be forfeited."
392392
393393 SECTION 14. Section 88-311, Hawaii Revised Statutes, is amended by amending the definition of "hypothetical account balance" to read as follows:
394394
395395 ""Hypothetical account balance" means:
396396
397397 (1) For members who became members before July 1, 2012, or police officers who became members after June 30, 2023, the sum of:
398398
399399 (A) One and one-half times the sum of:
400400
401401 (i) Employee contributions made, either by the member or on behalf of the member, pursuant to section 88-325;
402402
403403 (ii) Accumulated interest at the regular interest rate on the employee contributions; and
404404
405405 (B) Any employee contributions, including rollovers and contributions used to convert credited service to class H credited service, or used to purchase service, and accumulated interest on the employee contributions at the regular interest rate; or
406406
407407 (2) For members who become members after June 30, 2012, the sum of:
408408
409409 (A) One and one-fifth times the sum of:
410410
411411 (i) Employee contributions made, either by the member or on behalf of the member, pursuant to section 88-325; and
412412
413413 (ii) Accumulated interest at the regular interest rate on the employee contributions; and
414414
415415 (B) Any employee contributions, including rollovers and contributions used to convert credited service to class H credited service, or used to purchase service, and accumulated interest on the employee contributions at the regular interest rate."
416416
417417 SECTION 15. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
418418
419419 SECTION 16. This Act shall take effect on July 1, 2023; provided that the amendments made to sections 88-45 and 88-74, Hawaii Revised Statutes, by sections 5 and 8 of this Act, respectively, shall not be repealed when those sections are amended on January 1, 2024, by section 17(d) of Act 278, Session Laws of Hawaii 2022.
420420
421421
422422
423423 INTRODUCED BY: _____________________________
424424
425425 INTRODUCED BY:
426426
427427 _____________________________
428428
429429 Report Title: Employees' Retirement System; Police Officers; Retirement; Medical Coverage; Spousal Benefits; Minimum Age; Years of Credited Service Description: Provides police officers who become members of the ERS after 6/30/2023 with retirement benefits similar to those provided for members of the ERS who became members before 7/1/2012, including but not limited to calculation of retirement allowance, minimum age or years of credited service requirements, and vesting period. Allows retired police officers hired after 6/30/01 to be treated as if employment began before 7/1/01 in order to maintain spousal health benefits. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
430430
431431
432432
433433
434434
435435 Report Title:
436436
437437 Employees' Retirement System; Police Officers; Retirement; Medical Coverage; Spousal Benefits; Minimum Age; Years of Credited Service
438438
439439
440440
441441 Description:
442442
443443 Provides police officers who become members of the ERS after 6/30/2023 with retirement benefits similar to those provided for members of the ERS who became members before 7/1/2012, including but not limited to calculation of retirement allowance, minimum age or years of credited service requirements, and vesting period. Allows retired police officers hired after 6/30/01 to be treated as if employment began before 7/1/01 in order to maintain spousal health benefits.
444444
445445
446446
447447
448448
449449
450450
451451 The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.