Bill > SB1401

This bill modifies the Employees' Retirement System (ERS) by reducing the minimum number of years of credited service required for Tier 2 members to become eligible for vested benefit status from ten years to five years, effective July 1, 2027. Currently, employees who became members of the ERS before July 1, 2012 (Tier 1) need five years of service to be vested, while those who became members after that date (Tier 2) need ten years. The bill aims to help state and county employers with recruitment and retention of qualified employees by making it easier for workers to secure retirement benefits. To offset the potential financial impact, the bill also increases employer contribution rates slightly, from 24% to 24.19% for most employees and from 41% to 41.19% for police officers, firefighters, and corrections officers, starting in fiscal year 2025-2026. Actuaries have determined that this change will only marginally extend the system's full funding period by approximately four months. The bill applies to different employee classes (A, B, and H) and includes provisions to ensure a smooth transition for members who are in service or return to service after the specified date.

Budget and Finance, Labor and Employment

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1401&year=2025