Bill > SB1401

This bill modifies the Employees' Retirement System (ERS) by reducing the minimum years of credited service required for Tier 2 employees (those who became members after June 30, 2012) to achieve vested benefit status from ten years to five years, effective July 1, 2027. The bill adjusts multiple sections of Hawaii's Revised Statutes to implement this change, which will allow employees who become or return to service after June 30, 2027, to become eligible for retirement benefits with five years of service instead of ten. To offset the potential financial impact of this change, the bill also increases employer contribution rates slightly, from 24 percent to 24.19 percent for general employees and from 41 percent to 41.19 percent for public safety employees starting in fiscal year 2025-2026. The legislature believes this modification will help state and county employers recruit and retain qualified employees by making retirement benefits more accessible, and actuarial analysis suggests the change will only minimally extend the system's full funding period by approximately four months.

Budget and Finance, Labor and Employment

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1401&year=2026