(Relating to the Employees' Retirement System). :" A REPORT ON THE FOLLOWING:
(1) REDRAFTING OF TIlE RETIREMENt SYSTEM LAWS SO THAT THEY WILL BE EASILY UNDERSTOOD.
(2) PROVIDING MORE ADVISORY SERVICES TO EMPLOYEES CONTEMPLATING RETIREMENT.
(3) IMPROVING THE RETIREMENT BENEFITS FOR EMPLOYEES.
Af> REQUESTED BY SENATE RESOLUTION NO. 69
ADOPTED BY THE THIRD LEGISLATURE, STATE OF HAWAI I
Prepared By: EMPLOYEES t RETIREMENT SYSTEM
OF THE STATE OF HAWAII
MARCH 10, 1967
STATE OF HAWAII
EMPLOYEES' RETIREMENT SYSTEM
82S MILILANI STREET
HONOLULU, HAWAII 96813
March 10, 1967
The Ho~orable John J. Hulten President of the Senate The Fourth Legislature State of Hawaii Iolani Palace Honolulu) Hawaii 96813
Through: Ho~orable John A. Burns Governor of Hawaii
Dear Sir:
In compliance with Senate Resolution No. 69. as adopted by the Senate of the Third Legislature on March 21, 1966 (see Exhibit A), we take pleasure in furnishing the following report with respect to each of the provisions of the Resolution:
1. "Contract For The Services Of An Expert In Redrafting The Re­ tirement System Laws So That They Will Be Easily Understood By Al1 Employees Of The Sta':e And Counties."
In August 1966, the Sys tern entered into a contract \I1i th the Revisor of Statutes to revise the retirement laws in order to make them as intelli­ gible as possible by undertaking the following:
(a) Examination and redrafting of all the laws in Chapter 6. RLH 1955, as amended, and the laws relating thereto;
(b) Removal from this body of laws of all repealed, unconstitutional, obsolete and unnecessary pro­ visions;
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The Honorable John J. Hulten -2- March 10, 1967
(c) Rearrangement of the effective provisions of law to improve their organization;
(d) Clarification and simplification of language;
(e) Identification of conflicts and ambiguities, with recommendations in form of bills for re­ solving them;
(f) Preparation of report of each change of the law, with explanations; and
(g) Preparation of recommendations in form of bills of additional laws and substantive changes to fill gaps and to generally improve the law.
To accomplish the terms of the contract, the System, with the approval of the Revisor of Statutes and his advisory committee, engaged the services of Hr. Ha.rold C. Hill, former Executive Secretary of the Employees' Retirement System who had retired in early 1966, and of Martin E. Segal Company, the System's actuary.
The results of their study are embodied in this report, as Exhibit ~. The orginal draft of the revisions were completed and submitted in late October 1966 (see their letter of transmittal dated October 25, 1966), and after several meetings with the Revisor of Statutes and with the Advisory Committee, a number of corrections and changes were recommended and incor­ porated. As a reeult, changes within the scope of items (e) and (g), which were to be effected by bills, were instead incorporated in the different applicable sections, as follows:
(1) Providing for enrollment and designation of bene­ fiCiary - Section 6-3~.
(2) To include in Chapter 6, by reference, the pro­ visions of Chapter 5 relating to the loan of members' service to other governments - Section 6-48.1.
(3) Granting board authority to use system funds for necessary investment expenses - Section 6-97.
(4) Providing for termination of military service credit where member voluntarily remains in military ser­ vice - Section 6-119.
I I i i
(6) Adjustment for deficiency in accumulated contri­ butions - Section 6-69.
(7) Return to service of a member who has vested benefit status - Section 6-75.1.
(8) Return to service of a former member - Section 6-49.1.
(9) Relating to the offset of workmen's compensation payments - Section 6-67.
We urge that the revisions of Chapter 6, RLH 1955, as presented under Exhbit B hereof be enacted into law.
2. ilFrovide Advisory Services To All Employees Who Are Contem­ plating Retirement And To Advise them Of The Options That Are Available And The Option That May Best Suit The Employee's Needs. 1I
Hawaii's Retirement System is generally recognized throughout the country as one of the finest, if not the finest, in the nation today. At the same time, it is also one of the most complex. To be able to explain the various benefits--death benefits, disability retirement benefits, service retirement benefits, particularly those under the various options--requires personnel of high calibre. Our program in this area has been hampered by our inability to trn~n and retain capable persons. This, together with the heavy workload increases over the past several years, has resulted in a curtailment of our services in furnishing estimates of benefits under the various options of retirement by 1Uniting such estimltes only to those who plan retirement not more than six months in the future. Person-to-person counselling ser­ vices are available to such persons by calling at our office. However, these services are not available to those on the neighbor islands.
To provide more advisory services, we have requested (1) the De­ partment of Personnel Services to review the positions in our Enrollment, Claims and Benefits Branch, and (2) the Fourth State Legislature to autho­ rize two counselling positions.
The review of our positions is presently being conducted and it is hoped that with reclassification of the positions, we will be better able to' attract and retain persons witb the necessary qualifications and talents essen­ tial to the proper performance of the services required of these positions.
The Honorable John J. Hulten -4- March 10, 1967
The System's budget for 1967-1968 contains a request, in the expansion area, for the two counselling positions. These two additional positions should adequately provide for the advisory services which have been curtailed and also the personal counselling services that should be made available for those on the neighbor islands. Since applications for retirement must be filed not earlier than 90 days but not later than thirty days before retire­ ment, it is planned that one of these counsellors will be utilized to travel to each of the outside islands once each quarter to provide the necessary counselling services to those filing for retirement within that period.
We urge your support of the requested additional counsellor posi- tione.
3. "Review The Retirement System Laws And To Submit A Report To The Fourth Legislature Of The State Of Hawaii, Regular Session Of 1967, With Recommendations Regarding The Possibility Of Im­ proving The Retirement Benefits For Employees."
With the passage of Act 222, SLH 1965, Hawaii's retirement system now provide benefits Which are probably the most liberal of any state retire­ ment system in the nation. Very few states can match Hawaii's low normal age of retirement of 55 years and a retirement benefit of 1/50th (2%) of average final compensation for each year of service. It is the considered opinion of the Trustees that more time should elapse before recommending further exten­ sive liberalization of benefits. However, two areas of the System's benefit structure do need tmmediate improvement and the Trustees have accordingly approved legislative proposals for the following:
(a) Improve the ordinary disability retirement benefit.
(b) Improve the ordinary death benefit.
Improve the ordinary disability retirement benefit. The present benefit under this type of retirement consists of 25 per cent of average final compensation for service of 10 to 15 years with an additional I per cent for each full year of service in excess of 15 years. This benefit was provided by Act 222, SLH 1965, and although it represents an improvement over the previous benefit (25% of average final compensation for service of 10 to 20 years, plus 1 per cent for each year over 20), it is nevertheless considerably less than the service retirement benefit provided by Act 222, SLH 1965, of 2 per cent of average final compensation for each year of creditable service. To correct this situation, the proposed legislation would bring the benefit more in line with that of the service retirement by providing 1-3/4 per cent of a~erage
The Honorable John J. Hulten -5- March 10, 1967
final compensation multiplied by the number of years of creditable service with a minimum of 30 per cent of average final compensation. The proposed bill will be as follows:
"Section 1. Section 6-45 of the Revised Laws of Hawaii 1955, as amended, is hereby further amended to read 4S follows:
"Section 6-4'. Allowance on ordinary dis­ ability retirement. Upon retirement for ordinary disability, a member shall receive a service retirement allowance if he has attained the age of fifty-five years, other­ wise he shall receive a retirement allowance of 1-3/4 per cent of his average final com­ pensation multiplied by the total number of years of his creditable service, except, that for each year of creditable service as a judge or elective officer, he shall receive a retire­ ment allowance computed as provided in section 6-42C, provided however. that in no event shall he receive less than 30 per cent of his aver­ age final compensation.
ftSection 2. This act shall take effect on July 1, 1967."
Improve the ordinary death benefit. Under present law, the bene­ ficiary of a member who dies in service after at least one year of service receives (1) the return of the accumulated contributions plus (2) 50 per cent of the salary earned in the 12 montha ~ediately prior to death, if the decedent has 10 or less years of service,plus,if he has over 10 years of service, an additional 5 per cent for each full year of service over 10 to a maximum of 100 per cent of the salary earned during the 12 months' period ~ediately prior to death. In lieu of these payments, if the mem­ ber had been eligible for a service retirement at the time of death, the beneficiary, if the spouse, may elect the monthly benefits which would have been payable had the member retired prior to death and had elected the Opti01 3 plan of retirement.
Thus, it can be readily seen that under the present law there is a low amount of death benefit protection during the employees' early years of membership in the System, particularly in the first 10 years. Yet, these individuals may well have responsibilities equal to those of the older members. Also, because of their being in the lower salary ranges, they are less able to afford adequate life insurance. Therefore, to improve the or­ dinary death benefits so as to provide better benefits to the family of the
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The Honorable John J. Hulten -6- March 10, 1967
younger __ bers, the proposed leaislation would amend the present law to provide that 1n the event of the death of any member with at least one year Qf service, his beneficiary shall ~eceive, together with his contributions, an amount which is no le8s than th'El equivalent of a year' 8 salary. The pro­ posed bill will read Ss·follows:
Attachs.
"Section 1. Section 6-51 of the Revised Law. of Hawaii 1955. as amended, is hereby further amended by deleting the peri04 after the word 'compensation' at the end of the first paragraph and substituting a semi-colon there­ for, and by adding the following thereafter;
'provided, however, that if he had at least one year of creditable service, in no event shall the ~unt. together with his accumu­ lated contributions, be less than the equi­ valent of 100 per cent of such compensation.'
"Section 2. This act shall take effect on July 1.1967."
We urge your support of these leg~slative proposals.
Respectfully submitted,
EXHIBIT A
STATE OF HAWAII
COP Y SENATE RESOLUTION NO. 69
RE'"U:=STING TH:8 BOARD OF TRUSTEES OF THE EMPLOYEES' RETIRE­ MENT SYSTEI1 OF TR:t:.: STATE OF HAl All TO REVI3\,{ THE RETIRE­ reNT Lil'. S AND TO SUBMIT -,1. RE~>ORT TO THE FOURTH LEGISLATU:lE OF THE ST.L1.TE OF RA'.!AII, REGULAR SESSION OF 1967, ~.lITH REC­ QI.lYlENDATIONS FOR IHPROVING THE PRESENT RETIREMENT LA1.JS.
WHEREAS, the present retirement laws are so complex that it is often impossible for an employee to read the statutes and to be able to determine the benefits he shall be entitled to receive upon his retireme~lt; and
"TH;::;R~.i\.:3 9 many retirees often discover they have selected a retire­ ment option that provides them with less than the maximum retirement benefits they had intended to select; and
'!H:.:iRLAS, many of the problems arising out of the selection of the wrong retirement option could have been avoided by proper counseling and assistance prior to selecting a retirement option; and
'.!H:8R~HS, it is the duty of the retirement system to provide con­ sultation services to each person prior to his retirement, to advise him of the benefits available under each retirement option so he may select the best option to fit his circumstances; and
\!HEREAS, it is possible for the Board of Trustees of the Employees! Retirement System to hire experts to simplify the retirement system laws and to make them comprehei.lsible; and
\·m .... :m~As, it is highly desirable that further improvements in our retirement system laws be made which will prove of benefit to the em­ ployees of the State and counties; now, therefore,
BE IT RESOLVED by the Senate of the Third Legislature of the state of Hawaii, Budget Session of 1966, that the Board of Trustees of the Employees' Retirement System of the State of Hawaii be, and they are hereby, requested to: (1) contract for the services of an expert in redrafting the retirement system laws so that they will be easily under­ stood by all employees of the State and counties; (2) provide advisory services to all employees who are contemplating retirement and to ad­ vise them of the options that are available, and the option that may best suit the employees' needs; and (3) review the retirement system laws and to submit a report to the Fourth Legislature of the State of RaVlaii, Regular Session of 1967 with recommendations regarding the pos­ sibility of improving the retirement benefits for employees; and
BE IT FUriTHER RESOLVED that duly certified copies of this Reso­ lution be transmitted to each of the members of the Board of Trustees of the Employees' Retirement System of the State of Hawaii.
(Adopted March 21, 1966)
TRANSMITT AL
o P
Trustees, '=mployees f Retirement System of the ctate of Hawaii
Gentlemen:
Pursuant to your authorization, we have undertaken to redraft the retirement and pension laws of the 3tate in conformity with the terms set forth in Memorandum of ;'...greement between the .system and the Revisor of~,tatutes of the ::tate of Hawaii, dated jeugust 17, 1966.
General terms of the agreement require that the finished study make the re­ tirement laws lias intelligible as possible to the public employees lf and that the work \lis in conformity with the format and style rules established by the Revisor. More specifically, it requires:
(a) Gxamination and redrafting all the laws in Chapter 6, R.L.H. 1955; (b) Remove all repealed, unconstitutional, obsolete and unecessary
provisions; (c) ?earrange the effective provisions to improve their organization; Cd) Clarify and simplify language; ( e) Identify confli cts and ambiguities; (f) ~eport each change with explanation; (g) Prepare recommendations in the form of bills of additional laws
and substantiative changes to fill gaps and generally improve the law, and as otherwise required to accomplish the foregoing objectives.
Preliminary study quickly disclosed the complexity and magnitude of this task, including the problem of compiling a comprehensive report in brief and simple form. After consulting with the nevisor of statutes, it was de­ cided to accomplish the purposes of items (a) through (d) by completely re­ arranging and redrafting Chapter 6, ?" .L.H. 1955, with an accompanying com­ mentary, keyed to each section, explaining changes made. Recommended changes within the scope of items (e) and (g) are also explained and supported by drafts in the form of bills to accomplish the necessary changes. In this manner, the redraft could be accepted in substitution for the present Chapter 6 and recommended substantive changes of law in the form of bills considered and acted upon separately. Therefore, this report is presented in the fol­ lowing form:
Part I
Part II
General prOVlSlons (including Pensioners' Bonus; formerly Part VII). Retirement for Public Officers and =mployees (all relating to the Gmployees 11,etirement system.;
Renumbered sections
Part III Pensions for (certain) policemen, firemen, and bandsmen
Part IV Municipal and county pension systems (including :'Other County Pensions" - formerly Part V.)
Part V Federal Social Security for Public Smployees (administrative provisions to comply with require­ ments of Federal Department of Health, Education and Welfare) Formerly Part VI.
130 - 151
160 - 183
190 - 210
Table of Contents: Listing each section by title and number with cross reference to R.L.H. 1955, section numbers. Explanation of changes in text. By sections - title and number. Recommended Bills, with explanations of purpose.
Part I is rearranged to include a new introductory section to express the purpose and organization of the chapter. Since this part is intended to apply to all parts of the chapter we have included the "Pensioners' Bonus ll
which applies to all pensioners and retirants and which is more suitably contained in this part than as a separate Part VII as heretofore.
Part II contains all of the laws relating to the 5mployees' Retirement System. These provisions receive the most attention by "public employees" and administrative staff and extreme care has been exercised to achieve accuracy of interpretation, simplicity of expression and a logical sequence of presentation of Part II in this report.
Part III had its beginning in Act 222, S .L. 1917, to IIprovide pensions for policemen, firemen ilnd bandsmen!! through pension plans in each county with full costs borne by each respective county on a cash basis. vJhen the Employees' Retirement System was enlarged to include county employees, these county pension plans for policemen, firemen and bandsmen were closed to new members and all such employees hired After December 31, 1927, became members of the system. Thus, these county plans were doomed to a lingering but in­ evitable extinction many years ago. Nevertheless, the language of this part has continued almost without amendment and although it may appear to be un­ necessarily cumbersome to supply service to a steadily diminishing member­ ship procedures are well established and must be continued not only for the benefit of the score or so of members who have not yet retired, but for the payment of pensions to several hundred pensioners. Although each county plan will eventually be eliminated through the attrition wrought by time, it is surprising to find that the number of pensioners today is almost the same as was reported by the Territorial Retirement and Pension Commission in 1948. This is due in part to the survivor pensions which frequently succeed employee pensions upon demise of retired pensioners.
Part IV began with Act 237 S.L. 1937, which established county pension systems for county employees and former employees who were found to be in­ eligible for the benefits of the 3mployees' ~etirement cystem. In 1945, Act 264 S.L. 1945, was enacted in a further effort to provide equitable treatment for certain part-time and per diem workers who, through the vagaries of adverse interpretations of existing laws, were being deprived of retirement or pension protection enjoyed by other classes of employees. This Act became Part V of Chapter 6. Both parts, IV and V, are served by the same pension boards and officials in each county.
~aigibility to benefits under these parts has far exceeded the emergency 'stop gap' coverage originally intended and no prospective date of termina­ tion of eligibility qualifications is foreseeable at this time, although the conditions causing the adoption of these corrective measures appear to have been almost completely eliminated.
Parts III and IV retain all of the proVlslons necessary for the administra­ tion of extensive pension plans which, in view of the comparative few indi­ viduals remaining to be served, may appear to be unnecessary. However, the only actual reduction in the effect of these provisions is in the.volume of potential beneficiaries and no modification of administrative provisions appears to be possible. Furthermore, all provisions are well understood by the small group of administrative officials who are familiar with present requirements and procedures and we can see no advantage in submitting revi­ sions at this time which would serve no useful purpose. However, since the provisions of Part V are purely supplemental to the provisions of Part IV, we have combined the two into a new Part IV.
Part VI, ?ederal Social Security for Public Zmployees, contains the authority for the Federal-State Agreement under which the benefits of the Federal old age and survivors insurance system otherwise known as Social Security, are extended to employees of the State and its political subdivisions, and the terms and conditions under which such coverage is obtained and maintained. The material contained in this part was written and revised on two or more occasions by the Attorney General's office in collaboration with the legal officer of the San Francisco regional office of the U.S. Department of Health, "Sducation and ';lelfare and it is technically correct to fill the needs of the ~tate and meet the exacting requirements of the federal agency. The only change that is recommended is the slight re-arrangement of material made to give introductory prominence to the intent of the legislature concerning fed­ eral social security for local public employees. Since Part Number V has been vacated this part is renumbered V and becomes the last part of the chap­ ter since Part VII - If Pensioners Bonus" has been incorporated into Part I.
In addition to the changes noted in the lIExplanationll portion of this report, many minor changes have been made to improve language or to conform to the Revisor's style rules. It is believed that these will be readily apparent and will not require explanation~ However, further explanation of other changes and reasons therefore may be required as the written explanations submitted are necessarily brief. I,'Je stand ready to offer further information where required at any time during the thirty days following the filing of this report. Since Dr. Schanes is domiciled on the Mainland, it would be appreciated if adequate advance notice be given if a conference is desired.
Very truly yours,
Section
PART I GENERAL PROVISIONS
1 Scope 2 Restrictions 3 Minimum pensions 4 Payment on death ot pensioner 5 Medical aid, etc., when tree 6 List of pensioners J who shall provide
7 8 9
20
21 22 23 24 25 26 27 28 28.1 29 29.1 30
31 32 33
Bonus payment; amount Bonus: requirements, limitations
retirants not eligible for authority to pay waiver by veteran appropriation limitation
PART II REl'IREMENT FOR PUBLIC OFFICERS AND EMPlOYEES
Definitions
Establishment - Organization
System established: name General administration vested in board Composition of board Vacancy - on board Expenses of trustees Oath of trustees Voting: rules Officers; employees; legal adviser Actuary Medical board Medical review board Prohibited interest of trustees and emplo1ees ot board
Membership - Service
Limitation of other statutes Membership generally Persons ineli~ible for membership; optional membership
S§tion
34 Enrollment 35 Employee contributions 36 Deducting employee contributions from salary 37 Membership: Class A and Class B members 38 Deduction in Class A member's account 39 Computation of a year of service 40 Employees paid partly from federal funds 41 Membership service generally 42 Service \'l!1ile member of the legislature 43 Service while legislative employee 44 Services of field personnel ot Hawaii national guard 45 School cafeteria managers and workers 46 Prior service generally 47 Prior service while per diem employee 48 Acquisition of credit for previous service 48.1 Members whose services are on loan to other governments 49 Termination ot membership 49.1 Return to service of a former member
Benefits
~ Credited service at retirement 51 Refund of additional contributions 52 Sc~vice retirement 53 Allowance on service retirement 54 Ordinary disability retirement 55 Alloy[,311ce on ordinary disability retirement 56 Sc~vice-connected disability retirement 57 Allowance on retirement for service-connected disability 58 Service-connected occupational disability retirement 59 Allo'\>!Cnce on retirement for service-connected. occupational
disability 60 Average final compensation 61 Return to service of a retirant 62 Appeal of decision of medical board 63 Selection of mode of retirement allowance - options 65 Ordinary death benefit 66 Accidental death benefit 67 Pensions offset by compensation benefits 68 Minimum amount 69 Adjustment for deficiency in accumulated contributions 70 Post retirement allowances 71 Exemption from taxation and execution 72 Garnishment in certain cases 73 Named beneficiaries; effect of marriage, divorce, etc. 74 Withholding ot income taxes 75 Rights of members separated from service 75.1 Return to service ot a member
Administration - Financing
S,gt~OD
78 Records 79 Actuarial data 81 Actuarial investigations, valuations 82 Correction of errors 83 Interest 84 Cash for meeting disbursements 85 Funds of the system 86 Board trustees of funds 87 Custodian of the funds 88 Annuity savings fund; annual statements 89 Payments from annuity savings fund 90 Pension accumulation fund 91 Post retirement fund 92 Expense fund 93 Minimum pension fund 94 County contributions to minimum pension fund 96 Investments 97 Service charges 98 Power to make agreements, etc. 99 Determination of employer normal and accrued liability
contributions 100 Amount of contribution by State and counties 101 State appropriations for system 102 Contributions by certain State agencies 103 Certification and payment of county contributions to
system 104 Guaranty
110 III 112 113 114 115 116 117 118 119 120 121
130 131 132
Definitions Service credit; payment of contributions Benefits and conditions applicable Service retirement benefit Ordinary disability retirement benefit Accidental disability benefit Ordinary death benefit Accidental death benefit Return of contributions Duration of service member's status Computation of compensation earned Right of amendment or repeal reserved; retroactive
effect
Application Certain other employees included Police, firemen and bandsmen pension system; trustees
powers
Segtion
133 Officers of board; duties 134 Medical board 135 Appropriations and expenditures 137 Use of donations, contributions, gifts or bequests 138 Disability retirement benefits 139 Re-examination of disability beneficiary; hearing 140 Service retirement benefits 141 Dismissal after twenty years' service; pension 142 Dismissal after ten years' service; pension 143 Death benefits; funeral expenses, payments to dependents 144 Benefits in lieu of other payments 145 Adjustments of pensions 146 Computation; service as a policeman, fireman or bandsman 147 Computation; prior credits 148 Orders, discipline, medical examination, etc. 149 Payments of pensions; inalienable 150 Forfeiture of pension 151 Public hearing; notice
PART IV HUNICIPAL AND OOUNTY PENSION SYSTEMS
160 Pension boards created 161 Members: appointment, terms, removals 162 Qualifications 163 Expenses; appropriations 164 Assistants; county clerk, attorney and treasurer 165 Meetings 166 Payment, conditions 167 Additional conditions 168 Widow's pensions 169 Amount 170 Computation of service 171 Examination by physician 172 Compliance with law required
PART V OTHER COUNTY PENSIONS
180 Pensions eligible 181 Restrictions as to personnel 182 Limitation of amount 183 County appropriations directed
PART VI FEDERAL SOCIAL SECURITY FOR PUBLIC EMPLOYEES
190 Declaration of policy 191 Definitions 192 Federal-5tate agreement
Section
193 Division of retirement systems 194 Modifications of agreement 195 Contributions by State employees 196 Collection of contributions 197 Adjustments 198 Plans for coverage of employees of political subdivisions 199 Referendum 200 Refusal or termination of plans 201 Payments by political subdivisions 202 Contributions by employees of political subdivisions 203 Delinquent payments 204 Contribution fund; established 205 Purpose of contribution fund 206 Payments to federal government 207 Custodian of fund 208 Appropriations to contribution fund 209 Rules and regulations 210 Studies and report
PART I
CHAPTER 6
PENSION ,'\ND RETIREllENT SYSTEMS
PART I. GENERAL PROVISIONS
6-1. Scope. This chapter comprises all provisions for pensions and retirement allowances [or employees of the state and the counties and their instrumentalities through pension and retirement systems described as follows:
PART I General Provisions.
PART II Retirement for Public Officers and Employees (Employees' Retirement System).
PART III Pensions for Certain Policemen, Firemen and Bandsmen.
PART IV Municipal and County Pension Systems for Certain County Employees.
PART V Other County Pensions.
PART VI Federal Social Security for Public Employees.
6-2. Restrictions. The pro~s10ns of this section shall be applicable to every pension and to every recipient or beneficiary thereof, granted or provided for by any special act of the legislature (other than benefits, or the recipients thereof, payable to beneficiaries or retirants of the employees' retirement system under Part II) whether such pension be payable by the State or by any county, or by any board, commission, bureau, department or other agency thereof:
(a) No such recipient or beneficiary shall be permitted to draw any such pension, or any portion thereof, in excess of $50 per month, while he is holding any salaried position or office in, under or by authority of the United States, the State, or any political subdivisions thereof. The pro­ visions of this subsection shall not apply to any such recipient or bene­ ficiary who is elected to the legislature or as a supervisor to the board of supervisors of any county.
(b) If the recipient or beneficiary is a widow, the pension so granted to her shall cease upon her remarriage.
(c) Any pension payable to any minor shall cease upon the minor reaching the age of eighteen years.
(d) If any male recipient or beneficiary cf a pension, having a wife at the time the pension was first granted to him dies, then his wife, as long as she remains a widow, shall be paid sixty per cent of the amount of the pension payable to the male beneficiary. (t. 1933, c. 157, s. 1; R.t. 1935, s. 7915; am. L. 1943, c. 44, s. 1; R. L. 1945, s. 631; am. t. 1947, c. 28, s. 1; R.t. 1955, s. 6-1.)
6-3. Minimum pen~~.Q.ll. Every pension of less than $30 per month payable under or pursuant to any law of the State by the State or by any county or independent public board or commission, other than benefits payable to me~ bers of the employees I retirement system or to the dependents or beneficiaries of such members under Part II, shall be increased to $30 per month, any pre­ vision in any other law to the contrary notwithstanding; provided that where the dependents of a deceased pensioner are receiving pensions by reason of his death, the total only of all amounts paid to such dependents shall be so increased.
The board of supervisors of each county, and each independent board or commission hereby affected, shall appropriate such funds as are necessary to pay the increases hereby allowed of pensions payable by their respective c01mties, boards and commissions. Sufficient funds to cover the increases hereby allc1tlOd of pensions payable by the State are hereby appropriated from the g~neral revenues of the State not otherwise appropriated, and the State comptroller shall issue warrants to pay such increases. (L. 1943, c. 143, SS. 1, 2; R.L. 1945, s. 6191; am. L. 1949, c. 250, s. 1; R.L. 1955, s. 6-3; am. L. 1957, c. 152, s. 1.)
6-4. Payment on death of pensioner. Whenever any person receiving a pension from the State or fram any county thereof dies, the amount next payable shall be prorated from the last payment date up to and including the date of death. The sum so prorated shall be paid to such person as may have been deSignated by the pensioner during his lifetime in a statement filed with the officer charged with payment of the pension, or, if no such designation has been made and filed, then the amount so due shall be paid to the executor or administrator of the estate of the pensioner. (L. 1931, c. 172, s. 1; R.L. 1935, s. 7917; am. L. 1941, c. 178, s. 1; R.L. 1945, s. 633; R.L. 1955, s. 6-2.)
6-5. Medic?1 aid, etc.! when fr~~. Every recipient of any retirement allowance or pension payable by the State or by any county or by any other governmental body or agency created by or under the Laws of the State who is actual~ and solely dependent upon his retirement allowance or pension for his maintenance and support or whose total income in whatever form or from whatever source received, including but not limited to, his retirement allowance or pension and any income of his spouse is less than $2,400 per annum shall, for himself and his spouse, be entitled to free medical treat­ ment from any government physician employed by the State or any county and to free hospitalization at any ~tato hospital or at a hospital where county patients are treated at stat~ expenses in the county wherein he resides.
:dhenever a retirant or penSioner having a spouse dies, then the spouse, as long as he or she remains single, shall be eligible for benefits under this section. (L. 1937, c. 90, s. 1; R.L. 1945, s. 634; R.L. 1955, s. 6-4; am. L. 1964, c. 64, s. 2; am. L. 1965, c. 260, s. 2.)
6-6. List of pensioners", who shall provide. The proper department of each county shall determine who is entitled to benefits under section 6-5 and shall provide to any government physician employed by the State or any county, and any county hospital or a hospital where county patients are treated at county expense in the county wherein the pensioner or beneficiary resides, a current list of pensioners and their spouses who are entitled to benefits under section 6-5. Upon request, the State retirement system shall provide to the proper departments of each county such information as may be required to administer the provisions vf section 6-5. (L. 1965, c. 260, s. 3.)
PENSIONERS BONUS
6-7, Bonus J?8:ym.ent; amount. Except as hereinafter provided, every pension or retirement allowance payable under the employees' retirement system of the State or payable pursuant to any law of the State, or by any oounty or independent public board or commission, shall be increased by a bonus for each month as follows:
(a) $56.44 to those retirants and pensioners who had, on or before June 30, 1966, ten or more years of service; provided that any service­ connected disability retirant shall be entitled to receive the bonus pay­ ment without meeting such minimum service requirement;
(b) $22.58 per month additional to the above bonus to those retirants or pensioners who retired before July 1, 1945;
(c) $22.58 per month additional to the above bonus or bonuses to those retirants or pensioners who have had twenty-one or more years of service;
(d) If the pension or retirement allowance as increased by such bonus or bonuses does not equal $146.74 per month, the bonus shaU be further inoreased by such sum not in excess of $22.58 as may bring the total of the penSion or retirement allowance and bonus to $146.74 per month; provided that where the dependents of a deceased pensioner are receiving pension by reason of his death, the total only of all amounts paid to such dependents shall be so increased and the increase herein shall be shared by them in proportion to the respective amounts of pension receivable by them exclusive of this inorease;
(e) In the case of a member of the employees' retirement system who retires on or after July 1, 1965, on a service retirement allowance pursuant to section 6-52 or for ordinary disability pursuant to section 6-54, the bonus payable under this section shall be further limited to the difference between:
(1) the retirement allowance he would have received had he retired on June 30, 1965, plus the bonusJ and
(2) his actual retirement allowance.
(f) Any provisions of this section to the contrary notwithstanding, effective January 1, 1966, there shall be paid to every person who, on June 30, 1965, was receiving a retirement allowance from the employees' retirement system or other pension payable under or pursuant to the law of the State or by any county or independent board or conmission. a special cost-of-living bonus of seven and one-half per cent of such retirement allowance or pension. (L. 1961, c. 175, s. 12; am. L. 1962, c. 29, s. 2; am. L. 1965, c. 222, s. 18.)
(NOTE: Subsections (a), (b), (c) and (d) effective on January 1, 1966. )
6-8. Bonus; reg.uirements, limitations. No retirement allowance or pension payable under the employees t retirement system shall be increased by any bonus for any retirant or beneficiary unless the person for whose service the pension is payable has had sufficient service to qualify for the minimum. service retirement allowance except as provided in subparagraph (a) of section 6-7; provided that this provision shall not operate to increase the pension of any person who was receiving a 'pensioner's bonus on July 1, 1951, without having met the minimum service requirements but such person shall continue to receive the pension he was receiving on June 30, 1955. (L. 1951, c. 175, s. 12; R.L. 1955, s. 6-251.)
~-9. Bonus; retirants not eligible for. No bonus shall be paid to any person who retires on or after July 1, 1957, and who will receive or who is receiving social security benefits when said benefits are based in whole or in part upon contributions made by the State or any of its political subdivisions. (L. 1961, c. 175, s. 12.)
6-10, Bonus; authority to paz,. The board of trustees of the mnployees' retirement system is hereby authorized and directed to pay the bonus to pensioners under the system, the comptroller is hereby authorized IlUd directed to pay the bonus to all State pensioners who are not under the system, and the appropriate officer of each county and each independent board or commission hereby affected, is hereby authorized and directed to pay the bonus granted to pensioners whose pensions are payable by the res­ pective counties, boards and commissions, all such payments to be made from allotments pursuant to section 6-12; and all such boards, commissions and officers are hereby directed to certify to the director of finance, at such times and in such manner as required by the director of finance, the amounts required to meet such bonus payments. (t. 1961, c. 175, pt. of s. 12.)
~
.' • .I
6-12. )2onus;- appropriation. The director of finance is authorized to include in future budgets of the department of budget and finance such sums as are required to pay the bonuses described in this part. Such ap­ propriations shall be allotted by the director of finance to the several boards, commissions and officers required to make such payments, except where there is a specific provision for payment of the bonus from other ftUlds, and in the case of the counties the money so allotted shall be paid into each respective COtUlty treasury and held in special funds solely for the purpose of paying bonuses in accordance with this part. (L. 1961, s. 175, s.D.)
6-13. Bonus payment - limitation. No bonus shall be payable to any person retiring after June 30, 1971. (L. 1961, c. 175, s.D.)
PART II
PART II. RETIREMENT FOR PUBLIC OFFICERS AND EMPIDYEES
6-20. Definitions 0 The following words and phrases as used in this part, unless a different meaning is plainly required by the context, shall have the following meanings:
liAccumulated contributions"~ The sum of all the amounts paid by, or deducted from the compensation of, a member and credited to his individual account in the annuity savings fund together with regular interest thereon.
i'Actuarial equivalent I. : A benefit of equal value to the accumulated contributions, annuity, pension or retirement allowance, when computed upon the basis of the actuarial tables in use by the systemo
"Annuity;;: Benefit payments for life derived from the accumulated contributions of a membero
i'Average final compensation": The average annual compensation as des­ cribed in section 6-60, which becomes part of the formula for the compu­ tation of a retirement allowance.
"Beneficiary": The recipient of any benefit from the system, or as the context may indicate, the natural person or persons designated by a member to receive the benefits payable in the event of his deatho
"Board": The board of trustees created by section 6-220
IiCountyll: The counties of Hawaii, Honolulu, Kauai and Maui, including their respective boards of water supply and other quasi-independent boards g
commissions and agencies.
"Credited service": Prior service plus membership service.
"Elective officers - elective officials": Elected officers of the State or any county including legislators and county supervisors or council­ men.
"Employee": Any employee or officer of the State or of any county whether appointed or elected.
"Firemen': All regularly employed members of the fire departments of the counties, whose principal duties are to prevent and fight fires.
j'Judge" : A justice of the supreme court or a judge of the circuit court of this Stateo
"Medical board": The board of physicians provided for in section 6-29.
"Medical review board": A board of physicians appointed to review appeals from the decisions of the medical board.
"}iIember": Any person included in the membership of the system.
, .'.
"Pensions il : Payments for life derived from money provided by the State or county, as the case may be.
hPer diem worker": A pet-son employed and compensated on an hourly or daily basis.
"Prior service": Service rendered by a member to the State, Territory or county or predecessor government prior to the establishment of the sys­ tem or, as specifically provided in this part, prior to the admission of certain groups or classes of employees into the system membership.
"Regular interest l .: Interest at four per cent per annum, compounded annually.
"Retirantil: A member who has retired and become a beneficiary of the system.
"Retirement allowance" : The benefit payable for life to which a member is entitled upon his retirement.
"Service": A period of service or employment rendered as an employee which constitutes the basis for entitlement to credit for membership service or prior service.
I'Service retirement": Retirement of a member for age or length of service.
('Systeml.: The employees 1 retirement system of the State of Hawaii 0
Establishment - Organization
6-2~-2Y.stem established: nam~. There shall be a retirement system for the purpose of providing retirement allowances and other benefits for employees. It shall have the powers and privileges of a corporation and shall be known as liThe Employees! Retirement System of the State of Hawaii ll
and by such name may sue or be sued, transact all of its business, invest all of its funds, and hold all of its cash and securities and other pro­ perty. (L. 1925, c. 55, s. 2; am. imp. L. 1927, SSe 1, 2, 5; R.L. 1935, s. 7921; am. L. 1935, c. 48, s. 3; R. L. 1945, s. 702; R.L. 1955, s. 6-21.)
£'-22. General administration of system vested in board. The general administration and the responsibility for the proper operation of the system and for making effective the provisions of this part are vested in a board of trustees; subject, however, to the area of administrative con­ trol vested in the department of budget and finance bysection l4A-l3. (L. 1925, c. 55, s. 5(1); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-60.>
6-23. Composition of board. The board shall consist of seven trustees as follows: (I) the director of finance of the State, ex-officio; (2) three members of the system, two of whom shall be general employees and one of whom shall be a teacher, to be elected by the members of the system under such rules and regulations as may be adopted by the board to govern such election to serve for terms of six years each, one of such terms to expire on January 1 of each even-numbered year; (3) three citizens of the State who are not employees, one of whom shall be a responsible officer of a bank authorized to do business within the State, or a person of similar experience, to be appointed by the governor to serve for a term of six years each, one of such terms to expire January 1 of each odd-numbered year. Each trustee shall serve until his successor is elected or appointed, as the case may be, and qualified. (L. 1925, c. 55, s. 5(2); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; am. L. 1947, c. 85, s. l(b); am. L. 1951, c. 93, s. 1; R.L. 1955, s. 6-61.)
6-24. Vacancy. If a vacancy occurs in the office of trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled, except in the case of the trustees elected by the members, in which case the vacancy may be filled for the unexpired term by the appointment of a member by the remaining trustees of the board. (L. 1925, c. 55, s. 5(3); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-62.)
6-25. Expenses of trustees. The trustees shall serve without com­ pensation, but they shall be reimbursed from the expense fund for all necessary expenses and for any loss of salary or wages they may suffer through serving the board. (L. 1925, c. 55, s. 5(4); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-63.)
6-26. Oath of trustees. Each trustee shall, within ten days after his appointment or election, take an oath of office that, so far as it devolves upon him, he will deligently and honestly administer the affairs of the board, and that he will not knowingly violate or willingly permit to be violated any of the provisions of law applicable to the system. Such oath shall be subscribed to by the member making it and certified by the officer before whom it is taken and shall be immediately filed in the office of the lieutenant governor. (L. 1925, c. 55, s. 5(5); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-64.)
6-27. Voting: rules. Each trustee shall be entitled to one vote in the board. Four concurring votes shall be necessary for a deciSion by the trustees at any meeting of the board.
Subject to the limitations of this part, the board shall, from time to time, establish rules and regulations for the administration of the funds of the system and for the transaction of its bUSiness. (t. 1925, c. 55, s. 5(6) (7); R.t. 1935, pt. of s. 7924; R.t. 1945, pt. of s. 707; am. t. 1951, c. 93, s. 3; R.t. 1955, s. 6-65.)
6-28. Officers, employers. legal adviser. The board shall elect from its membership a chairman and shall by a majority vote of all its members appoint a secretary, who may but need not be one of its members. It shall engage such actuarial and other service as shall be required to transact the business of the system. The compensation for all services engaged by the board and all other expenses of the board necessary for the operation of the system shall be paid at such rates and in such amounts as the board shall approve.
The attorney general shall be the legal adviser of the board. (L. 1925, c. 55, s. 5(8) (11); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-66.)
6-28.1 Actuary. The actuary shall be the technical adviser of the board. on the matters regarding the operation of the funds of the system and shall perform such other duties as are required in connection there­ with. (L. 1925, c. 55, s. 5(13); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-70.)
6-29. Medical board. The board shall designate a medical board to be composed of three physicians not eligible to participate in the system. If required, other physicians may be employed to report on special cases. The medical board shall arrange for and pass upon all medical examinationS required under the provisions of this part, shall investigate all essential statements and certificates by or on behalf of a member in connection with application for disability retirement, and shall report in writing to the board its conclusions and recommendations upon all the matters referred to it. (L. 1925, c. 55, s. 5(12); R.L. 1935, pt. of s. 7924; R.L. 1945, pt. of s. 707; R.L. 1955, s. 6-68.)
6-29.1. Medical review board. The board may appoint an independent review board of license a physicians to review such decisions of the medical board as may be referred by the board pursuant to an appeal filed under the provisions of section 6-62. The decisions of the medical review board shall be final and binding. (1. 1964, c. 53, s. 2.)
6-30. Prohibited interest of trustees and employees of board. Except as herein provided, no trustee and no employee of the board shall have any direct interest in the gains or profits of any investment made by the board, nor as such receive any payor emolument for his services. No trustee or employee of the board shall, directly or indirectly, for himself or as an agent in any manner use the moneys of the system, except to make such cur­ rent and necessary payments as are authorized by the board; nor shall any trustee or employee of the board become an indorser or surety or become in any manner an obligor for moneys loaned by or borrowed from the board. (L. 1925, c. 55, pt. of s. 7; R.L. 1935, pt. of s. 7926; R.L. 1945, s. 7ll, subs. 4; R.L. 1955, s. 6-80.)
Membership - Service
6-31. Limitation of other statutes. No other provision in any other statute which provides wholly or partly at the expense 01 the State or any county for pensions or retirement benefits for employees of the State or of any county, their widows or other dependents shall apply to members, retirants or beneficiaries of the system established by this part, their widows or other dependents, except such benefits as may be provided under Title II of the Social Security Act. (L. 1925, c. 55, pt. of s. 14; R.L. 1935, s. 7933; R.L. 1945, s. 718; R.L. 1955, s. 6-22; am. L. 1957, c. 143, s. 10.)
6-32. Membership generally. Except as otherwise provided in this part, all employees of the Territory or any county on July 1, 1945, shall be members of the system on such date, and all persons who thereafter enter or re-enter the service of the State or any county shall become members at the time of their entry or re-entry.
Per diem workers shall become eligible for membership on January 1, 1952, and all persons who are employed as per diem workers on or after January 1, 1952, shall become members of the system. Any person who was a per diem worker on or before December 31, 1951, shall not, so long as he is employed as a per diem worker, be required to become a member or to remain a member if he has elected on or before October 1, 1953, to with­ draw as a member.
Members of the legislature shall become eligible for membership on July 1, 1951. Any member of the legislature in service on July 1, 1951, or thereafter entering or re-entering the legislature, may become a member upon his own election. (L. 1925, c. 55, s. 3(1); am. L. 1927, c. 223, s. 1; am. imp. 1927, c. 251, SSe 1, 2, 5; am. L. 1929, c. 190, s. 1; R.L. 1935, s. 7922; R.L. 1945, pt. of s. 703; am. L. 1945, c. 73, pt. of s. l(b); am. L. 1951, c. 110, s. l(b); am. L. 1953, c. 37, s. l(c); R.L. 1955, s. 6-23,)
6-33. Persons ineligible for membership; optional membership. The board may deny the right to become members to any class of part-time employees or persons engaged in temporary employment of three months or less, or it may, in its discretion, make optional with persons in such classes their individual entrance into membership; provided that no officer or employee entering service after January 1, 1928, who is en­ titled to become a member of any penSion system under the provisions of Part III shall be entitled to become a member of the system.
Elective officers shall be eligible for membership and their in­ dividual entrance into membership shall be at their option. (L. 1925, c. 55, s. 3(3); am. imp. L. 1927, c. 251, SSe 1, 2, 5; am. imp. L. 1929, c. 190, s. 1; R.L. 1935, pt. of s.7922; R.L. 1945, pt. of s. 703; am. L. 1955, c. 141, s. l(c); R.L. 1955, s. 6-25; am. L. 1961, c. 181, s. 2.)
6-34- En,rollroept. Upon entering or re-entering service, an employee shall file with the board such information as the board may require for enrollment and administrative purposes including a designation of a person or persons to receive any benefits that may be payable in the event of his death.
An employee becoming a member of the system shall also present at such time and in such form as the board prescribes, evidence of his date of birtho No statement or record of age or birth made or presented by a member of the system may be impeached by such member or his successors in interesto
6-35. Employee contributions. On and after July 1, 1965, the normal contribution by each member to the annuity savings fund shall be six per cent of his compensation.
In addition to the foregoing, all members shall contribute one-half of one per cent of compensation to the post retirement fund. (L. 1925, c. 55, pt. of s. 8; R.L. 1935, pt. of s. 7927; R.L. 1945, pt. of s. 712, subs. 1; R.L. 1955, s. 6-82; am. L. 1957, c~ 231, s. l{e); am. L. 1961, c. 175, s. 5 and c. 181, s. 6; am. L. 1964, c. 62, s. 10; am. L. 1965, c. 222, s. 13.)
6-36. Deducting employee contributions from salary. The head of each department of the State and the auditor of each county shall cause to be deducted from the salary of each member on each and every payroll under his jurisdiction for each and every payroll period, the percentage of compensation of each member as provided under section 6-35. The total amount of deductions made from the salaries of employees and a record of the amount deducted from each member's compensation shall be transmitted to the system monthly or at such other times as may be agreed upon by the board. The amounts so deducted shall be paid into the an­ nuity savings fund and the post retirement fund and shall be credited to the individual accounts of the member from whose compensation the deductions were made. Regular interest shall also be credited to the individual account of the member in the annuity savings fund. (L. 1925, c. 55, pt. of s. 8; am. imp. L. 1927, c. 251, s. 4; R.L. 1935, pt. of s. 7927; R.L. 1945, pt. of s. 712, subs. 1; R.L. 1955, s. 6-83; am. L. 1957, c. 143, s. 8; am. L. 1963, c. 127, s. 16; am. L. 1964, c. 62, s. 11.)
6-37. Membership; class A members and class B members. On and after July 1, 1957, there are two classes of members in the system lmown as class A members and class B members, defined as follows:
(a) Class A members are those members who are covered by the provi­ sions of Title II of the Federal Social Security Act on account of service creditable under this part. Such class A members consist of: (1) all employees who enter the membership of the system on and after July 1, 1957, except employees in positions to which coverage under Title II of the Social Security Act is not extended; (2) all employees who were members of the system on July 1, 1957, who elected on a form approved by the board, to be covered by the Social Security Act.
(b) Class B members shall consist of all other members in the system. (1. 1957, c. 143, s. 2; am. 1. 1959, c. 236, s. 1.)
.2.-38. Deduction in class A member's account. An amount equal to the taxes under the Federal Insurance Contributions Act payable by a class A member for the period beginning January 1, 1956, and ending on the date class A membership is obtained, shall be deducted from his account in the system. Any member may elect to contribute to the system an amount equal to the taxes so deducted, which amount shall be credited to his account. (1. 1957, c. 143, s. 9.)
2-39. Computation of year of service. The board may fix and deter­ mine by appropriate rules and regulations how much service in any year is equivalent to a year of service but in no case shall more than one year of service be credited in twelve calendar months. Except as provided in section 6-4l(g), the board shall not allow credit as service for any period of more than one month's dUration during which the employee was absent with­ out pay. (1. 1945, pt. of s. 704; am. L. 1945, c. 73, pt. of s. l(c); R.L. 1955, s. 6-39.)
6-40. Employees paid partly from federal funds. ~fuere any employee, subject to the compensation law, has a portion of his salar,y paid from federal funds but is not subject to the federal retirement system, such employee shall be entitled to all benefits and be required to make all employee contributions under the employees' retirement system of the State of Hawaii based upon the full salar,y received by such employee, including that portion of the salar,y paid from federal funds.
The provisions of this section shall be retroactive as to all employees affected, upon the employee paying into "the system the contributions which would have been required had such employee I s full salar,y been paid by the State, together with the necessar,y interest accumulations. (R.t. 1945, s. 703.01; add. L. 1945, c. 25, SB. 1, 2; R.L. 1955, s. 6-24.)
6-41. Membership service generally. Membership service includes (a) service by an employee rendered since becoming a member, (b) service rendered prior to becoming a member but (l) subsequent to January 1, 1926, by an employee of the State or (2) subsequent to January 1, 1928, by an employee of any county, (c) service as an employee of the federal government where the function carried on by said government has been transferred to the State or any county, or where the employee has been transferred to the federal government and subsequently retransferred to the State or any county, (d) service of a governmental nature performed under the supervision or control of the State or any county, and per­ formed for the State or any county by an employee of an employer other than the State or county, (e) service rendered for the Territory in the office of the delegate to congress from Hawaii, (f) service as an employee of the Hawaii territorial guard, and (g) service while engaged in professional improvement pursuant to an approved leave of absence for such purpose, with or without pay. Membership service shall only be credited for any period for which the member makes the required contri­ butions to the system. (R.L. 1945, pt. of s. 704; am. L. 1945, c. 73, pt. of s. l(c); am. L. 1955, c. 256, s. 1; R.L. 1955, s. 6-31; am. L. 1959, c. 189, s. 1; am. L. 1965, c. 222, s. 4.)
6-42. Service while a member of the legisl.!ture. Under such rules and regulations as the board may adopt, any legislator electing to be- come a member or any former legislator electing to become a member, shall file, on a form approved by the board, a detailed statement of all service as a legislator rendered by him for which he claims credit and which is not otherwise credited to him under the provisions of this part. The board shall verify as soon as practicable the period of service therein claimed and shall allow prior service credit for all such service rendered prior to July 1, 1951, anything to the contrary in this part notwithstanding. All service rendered as a member of the legislature from and after JulY 1, 1951, shall be considered membership service. (R.L. 1945, s. 704.03; add. L. 1951, c. 110, s. lee); am. L. 1955, c. 248, s. 1; R.L. 1955, s. 6-38; am. L. 1963, c. 127, s. 2.)
6-43. Service while legislative employer. Any member takes leave 01 absence to be employed by the legislature durlng any legislative session, such member shall be entitled to all benefits and required to make all em­ ployee contributions under the employees i retirement system for the period during which such employee worked for the legislature.
Any employee who, prior to his becoming a member, was employed as an employee of the legislature during any legislative session shall be entitled to membership service for the period of such employment by apply­ ing and paying therefor as required by section 6-48 for the acquisition 01 membership service. (RoLo 1945, s. 704.01; add. L. 1947, co 58, So 1; am. L. 1951, c. 193, s. 1; R.L. 1955, so 6-370)
6-44. Services of field civilian personnel of the Hawaii national guard.. Civilian field personnel of the Hawaii national guard are entitled to membership credit for all service performed by them in such capacity since August 1, 1946, upon making application therefor and complying with the provisions of section 6-48, provided that by federal law or re­ gulation a payroll deduction has been made for the contribution required to be made into the system by such employee. (R.t. 1945, s. 704.04; add. L. 1953, c. 265, s. 1; R.t. 1955, s. 6-39.)
6-45. School cafeteria managers and workers. School cafeteria managers and workers shall be considered as employees paid by the State regardless of the source of the funds from which they are paid. Any other provision of this part to the contrary notwithstanding, any member classified as a cafeteria manager or worker may purchase twelve months' service credit per year during the time he was working on a nine-month schedule during a calendar year. (L. 1957, c. 43, s. 1, 2; am. L. 1965, c. 222, s. 8.)
~~6o.Prior __ servi~e gener~o Prior service is credited without cost to the member entitled theretoo Prior service includes (a) service as an employee rendered ~1) by an employee of the Territory prior to January 1, 1926, or (2) by an employee of any county prior to January 1, 1928, (b) service in a similar capacity paid for by the Republic of Hawaii or by the preceding provisional or monarchial governments, (c) all service creditable to him under any other retirement system supported wholly or in part by the State at the time he became a member of this system, (d) periods of honorable service in the army, navy, marine corps, coast guard and public health services of the United States aG any time between the dates of April 5, 1917 and J~ly 2, 1920, which service necessitated separation at the time of its inception from existing Territorial or county employment, (e) service as an employee during the period from January 1, 1926 to Decem­ ber 31, 1927, in the case of a member who became an employee of the Terri­ tory during said period was in the regular employ of any county immediately prior to the time he became a Territorial employee and was an employee of the TerritoFf on January 1, 1928, and (f) other areas or periods of service described and designated in this part to constitute prior service. (L. 1925, c. 55, pt. of s. 4; am. L. 1927, c. 223, s. 2; am. imp. L. 1927, c. 251, ss. 1, 2; am. imp. L. 1929, c. 190, s. 1; am. imp. L. 1931, c. 219, ss. 1, 2, 3; R.L. 1935, pt. of s. 7923; am. L. 1935, c. 48, s. 6; am. L. 1937, c. 235, s. 1; R. L. 1945, pt. of s. 704; am. L. 1945, c. 73, pt. of s. l(c); R.L. 1955, s. 6-30.)
6-47. Prior service credit while per diem employee. Employees in per diem pOSitions, employees who formerly filled per diem positions, and former employees who filled per diem positions on or after January 1, 1928, shall be allowed full prior service credit in the system for their per diem serv­ ice. (t. 1959, c. 173, SSe 1, 2; am. t. 1960, c. 22, SSe 2, 3; am. t. 1964, c. 62, s. 2.)
6-48. Acquisition of credit for previous service. Under such rules and regulations as the board may adopt, any member may file with the board a statement of all service as an employee of or other service paid for by the State or a county rendered prior to his last becoming a mem­ ber which is not othervlise credited to him, for which he claims prior service credit, and also a statement of such services for which he claims membership service credit and for which he agrees to have additional deductions made from his compensation or to make a lump sum payment as hereinafter d33cribod.
As soon as practicable aft6r the filing of any such statement, the b03.rd shall verify the service therein claimed and detennine the service crodit alloHD.ble therefor. Verified prio::' service shall be credited fortb;ith. For a poriod O'1ua1 to tho period for which membership serv­ ice credit is allo1t{ablo, tho deductions from the member's compensation sh3.11 be bdcG the proportion provided for in section 6-35, and such contributions shall be paid to the system and shall be credited to the individu".l account of the membe,!,' and become part of his accumulated contributions. 7he momber may, at his option, pay in a lump sum the contributions payab10 0'.1 account of the period for which membership service is allov;able. Such lump sum contributions shall be computed at tho contribution rate provided by section 6-35, applied to the member's mCilthly sala:.y at tho tll18 of payment multiplied by the number of months :or which membe:.:ship 8:)r'rice credit is being claimed.
I{J~L:;rship ser7ice credit in additior. to any other service credited to the wGillber shall bo allowed the member for the period for which such double deductions or lump s~~ contributions have been made.
i~o post roth'smenc contributions shall bo required for any service being cle.imed Hhich is p:-ior to July 1, 1961. (R.L. 1945, pt. of s. 704; am. :S. 19/;.9, c. /59, pt. of s. 1; am. L. 1951, c. 110, s. l(c); R.L. 1955, .J. 6-35; ~Jn. Lo 1961, c. 181, s. 3.)
6-48.1. Members ,,'hose services are on loan to other governments. Any member whose services are on loan to another government, as authorized by section 5-44, shall retain his membership and shall receive credit in the system for such service, provided he returns to his former employment within ninety days after the termination of such service and, provided further, that the government receiving the loan of his services fulfills all of the requirements of section 5-45.
6-49. Termination of membership.
(a) Except as otherwise provided by section 6-75, any member absent from service for four calendar years following the calendar year in which his employment terminated shall cease to be a member.
(b) Any member who withdraws his contribution~ becomes a retirant, or dies, ceases to be a member as of the date of withdrawal, retirement or death. (L. 1925, c. 55, s. 3(4); R.L. 1935, pt. of s. 7922; R.L. 1945, pt. of s. 703; am. L. 1945, c. 73, pt. of s. l(b); am. L. 1947, c. 103, s. l(a); R.L. 1955, s. 6-26; repealed L. 1965, c. 222, s. 3.)
6-49.1, Return to service of a former member.
(a) If a former member who has been out of service for a period of tour full calendar years or more after the year in which he left service, or 11 a former member who withdrew his accumulated contributions returns to serv­ ice, he shall become a member in the same manner and under the same condi­ tions as anyone first entering service; however~ he may obtain membership service credit for his former credited service as provided in section 6-48. If such member did not withdraw his accumulated contributions prior to his return to service, such contributions shall be returned to him as part of the process of enrolling him in the system.
In order to be eligible for any benefit, he must fulfill the member­ ship service requirements for such benefit through membership service after again becoming a member in addition to meeting any other eligibility re­ quirement established for such benefit.
(b) If a former member who did not withdraw his accumulated contri­ butions returns to service within four full calendar years after the year in which he left service, he shall again become a member in the same manner and under the same conditions as anyone first entering service, except that he shall be credited with service credit for the service he had when he terminated employment and his new and previous accumulated contributions shall be combined.
Benefits
6-50. Credited service at retirement. Credited service at retire­ ment on which the retirement allowance of a member shall be based shall consist of his membership service and his prior service, if any, as pro­ vided in this part. (L. 1925, c. 55, pt. of s. 4; R.L. 1935, pt. of s. 7923; R.L. 1945, pt. of s. 704; am. L. 1945, c. 73, pt. of s. 1(c); am. L. 1947, c. 140, s. 1(c); R.L. 1955, s. 6-40; am. L. 1964, c. 62, s. 3.)
6-51. Refund of additional contributions. A member may withdraw at any time prior to his retirement, all his voluntary contributions made to provide an annuity in addition to the retirement allowance provided under section 6-53. (L. 1959, J.R. 23, s. 1; am. L. 1963, c. 127, s. 17.)
6-52. Service retirement. Retirement of a member on a service re­ tirement allowance shall be made by the board as follows:
(a) Any member who attains the age of fifty-five years or who has twenty-five years of credited service, may be retired upon his written application to the board specifying on what date, not less than thirty days nor more than ninety days subsequent to the execution and filing thereof, he desires to be retired.
(b) Any member attaining the age of seventy years shall be retired on the first day of the calendar month next succeeding that in which he attains such age; provided, an elective official may continue or be re­ stored to active membership in the system after the age of seventy years during the period such member is serving in his elective capacity.
(c) Any elective official who qualifies for service retirement by age or length of service may retire and receive a service retirement allowance although he continues to fill his elective position.
(d) Notwithstanding any other provision of this section, a member must have at least five years of credited service to be eligible for service retirement. (L. 1925, c. 55, s. 6(1); R.L. 1935, pt. of s. 7925; R.L. 1945, s. 708, subs. 1; am. L. 1947, c. 85, s. l(c}; R.L. 1955, s. 6-41; am. L. 1957, c. 24, s. 1 and c. 231, s. l(b); am. L. 1959, c. 67, s. 1; am. L. 1961, c. 175, s. 1; am. L. 1963, c. 127, s. 3 and c. 129, s. 2; am. L. 1964, c. 62, s. 4.}
6-S3. Allowanye on service retirement. Upon retirement for serv­ ice, a member shall receive a retirement allowance as follows:
(a) If the member has attained the age of fifty-five, a retirement Allowance of one-fiftieth of the average final compensation of the mem­ her multiplied by the total number of years of his credited service. [f the member has not attained the age of fifty-five, a retirement allow­ I1IlCe computed as though he had attained age fifty-five, reduced in ac­ cordance with factors of actuarial equivalence adopted by the board upon the acivice of the actuary.
(b) If the member has made voluntary additional contributions for the purchC'..se of an additional annuity and has not applied for the refund thereof as permitted by section 6-51J> he may accept such refund at time " f retil'ement or 1 in lieu thereof, receive in addition to the retirement ,lllowance r:.covided in (a) hereof, an annuity which is the actuarial l!qnivalc:,1.t of such additional contributions with regular interest.
Cc) If t he member he.S had ten or more years of credited service~ lncluding service as a judge or an elective officer, his retirement ,~.llowcmce may be computed on the following basis: (1) for each year I) f credited s ervice as a judge or an elective officer, 3.5 per cent of his a'lerage final cc-npe:1.sation in addition to an annuity which is the lCtuari2J. equivalent of his &ccumulat-::d contributions 8,11ocable to the period of such s en rice; and (2) for all other credited service as provided i.n subsectior!s (n) 3.l1d (b) he:.~eof. If the member has not attained the age of fifty-five at t he tin3 he terminates service, he may elect to re­ ceive the benefit p'1yable under subsection (c) (1) hereof immediately as though he had attained age fifty-five. No allowance shall exceed seventy­ five pe~:, cent, of the ::!.v·3rC',c; € final compensation. If the allowance ex­ cccris such lir..it, it. sh2.ll be 2.djusted by reducing the annuity included i n subsection (c) (1) and such port.ion of the accumulated contributions specified in the same subsection as may be in excess of the requirements of the reduced e.!'1:1uity s:1all be returned to the member.
The allmlTance for judges under this section, together with the retirement allow&llce provided by the federal government for similar servic 8, shall in no case exceed severty-five per cent of average final co~psnstion. (L. 1925, c. 55, s. 6(2); R.L. 1935, pt. of s. 7925; R.L. 1945, 5.708, subs . 2; am. L. 1945, c. 73, s. l(e); am. L. 1947, Co 85, s. l(d); R.L. 1955, s. 6-42; am. Lo 1957, c. 143, s. 3 and c. 231, s. ICc); am. L. 1961, c. 175, s. 2; am. L. 1961, c o 181, s. 2; am. L. 1962, c. 20, s. 3; am. L. 1963, c. 127, s. 4; am. L. 1964, c. 62, s. 5; am . L. 1965, c. 222, s. 5.)
6-54. Ordinary disability retirement. Upon the application of a member in service or of the head of his department, any member who has had ten or more years of credited service shall be retired by the board on an ordinary disability retirement allowance if the medical board, after a medical examination of such member, certifies that (a) he is mentally or physically incapacitated for the further performance of duty, (b) that such incapacity is likely to be permanent, and (c) that such member should be retired.
Retirement shall become effective upon the date the board specifies which is not less than thirty days next succeeding the date of filing of application. (L. 1925, c. 55, s. 6(3); R.L. 1935, pt. of s. 7925; R.L. 1945, s. 708, sub. 3; am. L. 1951, s. 158, s. l(a); R.L. 1955, s. 6-44.}
6-55. Allowance on ordinary disability retirement. Upon retirement for ordinary disability, a member shall receive a service retirement allow­ ,mce if he has attained the age of fifty-five years, otherwise, he shall receive a retirement allowance of twenty-five per cent of his average final compensation plus one per cent of his average final compensation for each full year of credited service over fifteen except that for each year of ~redited service as a judge or an elective officer, he shall receive a retirement allowance computed as provided in section 6-53(c) (1). (L. 1925, c. 55, s. 6(4); R.L. 1935, pt. of s. 7925; R.L. 1945, s. 708, subs. 4; R.L. 1955, s. 6-45; am. L. 1957, c. 143, s. 4 and c. 231, s. l(d); am. L. 1961, ~. 175 and c. 181; am. L. 1962, c. 20, s. 3; am. L. 1963, c. 127, s. 5; am. L. 1964, c. 62, s. 7; am. L. 1965, c. 222, s. 7.)
6-56. Service-connected total disability retiremept. Upon appli­ cation of a member, or of the head of his department, any member who has been permanently incapacitated as the natural and proximate result of an accident occllrring while in the actual performance of duty at some definite time and place, or as the cumulative result of some occupational hazard, through no willful negligence on his part, may be retired by the board for service-connected total disability provided that:
(a) In the case of an accident occurring after July 1, 1963, the employer shall file with the board a copy of the employer's report of the accident submitted to the bureau of workmen's compensation;
(b) An application for retirement is filed with the board within two years of the date of the accident or the date upon which workmen's compensa­ tion benefits cease, whichever is later;
(c) Certification is made by the head of the agency in which the member is employed, stating the time, place and conditions of such service per­ formed by such member resulting in such disability and that the disability was not the result of willful negligence on the part of such member;
(d) The medical board certifies that such member is incapacitated for gainful employment and that such incapacity is likely to be permanent.
In the case of firemen, the cumulative effect of the inhalation of smoke, toxic gases, chemical fumes and other toxic vapors on the heart, lungs and respiratory system shall be construed as an injury received or disease contracted while in the performance of their duty and as the cumu­ lative result of some occupational hazard for the purpose of determining total disability retirem0nt under this section. (Effective January 1, 1966.)
The board may waive strict compliance with the time limits within which a report of the accident and an application for service-connected disability retirement must be filed with the board if it is satisfied that the failure to file within the time limited by law was due to ignor­ ance of fact or law, inability, or to the fraud, misrepresentation or deceit of any person, or because the applicant was undergoing treat~nt for the disability or was receiving vocational rehabilitation services occasioned by the disability.
The board shall determine whether or not the disability is the result of an accident occurring while in the actual performance of duty at some definite time and place and that the disability was not the result of willful negligence on the part of the member. The board may accept as conclusive: (1) the certification made by the head of the agency in which the member is employed; or (2) a finding to this effect by the medical board. (L. 1925, c. 55, s. 6(5); R.L.1935, pt. of s. 7925; R.L. 1945, s. 708, subs. 5; am. L. 1951, c. 158, s. l(b); am. L. 1955, c. 24, s. 1; R.L. 1955, s. 6-46; am. L. 1963, c. l27, s. 6; L. 1965, c. 225, s. 1.)
6-57. Allowance on retirement for service-connected total dis­ ability. Upon retirement for service-connected total disability, a mem­ ber shall receive a retirement allowance which shall consist of an annuity plus a pension of sixty-six and two-thirds per cent of his average final compensation. (L. 1925, c. 55, s. 6(6); R.L. 1935, pt. of s. 7925; R.L. 1945, s. 708, subs. 6; R.L. 1955, s. 6-47; am. L. 1957, c. 143, s. 5; am. L. 1961, c. 175, s. 4; am. L. 1963, c. 127, s. 8.)
6-58. Service-connected occupational disability retirement. Upon application of a member, or of the head of his department, any member who has been permanently incapacitated for duty as the natural and proximate result of an accident occurring while in the actual performance of duty at some definite time and place, or as the cumulative result of some oc­ cupational hazard, through no willful negligence on his part, may be retired by the board for service-connected occupational disability pro­ vided that:
(a) In the case of accident occurring after July 1, 1963, the em­ ployer shall file with the board a copy of the employer's report of the accident submitted to the bureau of workmen's compensation;
(b) An application for retirement is filed with the board within two years of the date of the accident, or the date upon which workmen's compensation benefits cease, whichever is later;
(c) Certification is made by the head of the agency in which the member is employed, stating the time, place and conditions of such service performed by such member resulting in such disability and that the dis­ ability was not the result of willful negligence on the part of such mem­ ber; and
(d) The medical board certifies that such member is incapacitated for the further performance of duty, that such incapacity is likely to be permanent.
In the case of firemen, the cumulative effect of the inhalation of smoke, toxic gases, chemical fumes and other toxic vapors on the heart, lungs and respiratory system shall be construed as an injury received or disease contracted vlhile in the performance of their duty and as the cumulative result of some occupational hazard for the purpose of deter­ mining occupational disability retirement under this section. (Effec­ tive January 1, 1966.)
The board may waive strict compliance with the time limits within which a report of the accident and an application for service-connected disability retirement must be filed with the board if it is satisfied that the failure to file within the time limited by law was due to ignorance of fact or law, inability, or to the fraud, misrepresentation or deceit of any person, or because the applicant was undergoing treat­ ment for the disability or was receiving vocational rehabilitation serv­ ices occasioned by the disability.
The board shall determine whether or not the disability is the result of an accident occurring while in the actual performance of duty at some definite time and place and that the disability was not the result of willful negligence on the part of the member. The board may accept as conclusive: (1) the certification made by the head of the agency in which the member is employed; or (2) a finding to this effect by the medical board. (L. 1963, c. 127, s. 7; L. 1965, c. 225, s. 2.) (Member entitled to benefits available prior to enactment of Act 127/63 if date of accident resulting in disability occurred prior to July 1, 1963 -- A.G. Ope 63-52.)
6-59. Allowance on retirement for service-connected occupational disability. Upon retirement for service-connected occupational dis­ ability, a member shall receive for a period of three years from the date of retirement, an allowance computed in the manner prescribed for service-connected total disability. In addition, within this three­ year period, he shall be reimbursed in full for all expenses for all services, drugs and appliances approved by the medical board as being necessary to the treatment and care of the disability, which expenses are not met by the Hawaii public employees I health fund. vlithin the three-year period, the system shall also pay the cost of any physical and vocational rehabilitation services approved by the medical board. After the completion of three years, the annuity being paid shall be continued and the penSion shall be thirty-three and one-third per cent of his average final compensation; provided, if the medical board shall, within the three-year period of time, find and certify the dis­ ability pensioner is totally incapacitated for gainful employment, the board shall award a service-connected total disability benefit in which case benefits shall be paid under section 6-57.
Any other provision of this part notwithstanding, a retirant re­ ceiving service-connected occupational disability benefits shall con­ tinue to receive such benefits irrespective of his later employment or if he later becomes a member of the retirement system. If such a retirant again becomes a public employee, his membership status in the system shall be determined as though he were entering public employment for the first time and all benefits related to such new membership shall be accrued and paid without reference to the service-connected occupational disability benefits being paid. (L. 1963, c. 127, s. 9.)
6-(;1). Average final compensation. The average annual compensation, payor salary upon which a member has made contributions as required by sections 6-35 and 6-36 (a) during his five highest paid years of credited service, or (b) if he has had less than five years of credited service, then during his actual years of credited service.
In computing the compensation of a judge, the compensation paid to him by the United States as well as by the Territory shall be included.
For service rendered as a member of the legislature after the ad­ mission of this State into the union, the annual compensation of a member for the purpose of determining his average final compensation shall be computed as follows: (a) during a year in which a general session is held, an amount equal to four times the salary of a member of the legis­ lature for a general session; and (b) during a year in which a budget session is held, an amount equal to six times the salary of a member of the legislature for a budget session.
For service rendered as a member of the legislature prior to the ad­ mission of this State into the union, the annual compensation of a member shall be deemed to have been four times the salary of a member of the legislature for a regular session for each year during his term of office, or $4,000 per year.
6-610 Return to service of a retiranto Except as otherwise provided in section 6-59, the retired status of a retirant who accepts employment requiring membership in the system shall be terminated and he shall be re­ enrolled as an active member with all attendant responsibilities and pri­ vileges as set forth in this parto
If such re-enrolled member should again retire after a period of re­ employment of less than three years, his retirement allowance shall consist of his original retirement allowance p~us such further benefit as may have accrued during his period of re-employment computed in accordance with the benefit formula in effect on the date upon which his second retirement be­ conles effective. However, should his period of re-employment be three years or more, his retirement allowance shall be recomputed upon the basis of his entire period of credited service in accordance with the benefit formula in effect on the date such retirement becomes effectiveo
6-62. Appeal of decision of medical board. A member who is not satisfied with the decision of the medical board may appeal such de­ cision to the board within sixty days after receiving notification of the decision of the medical board. The board, after hearing such appeal, may refer the matter to the medical review board, whose de­ cision shall be final and binding. The right of appeal to the board shall apply to all decisions and recommendations which the medical board is authorized to make. (L. 1964, c. 53, s. 2.)
6-63. Election of mode of retirement allowance. Maximum Allowance: Upon retirement, any member may elect to receive the maximum retirement allowance to which he is entitled computed in accordance with the pro­ visions described under sections 6-53, 6-55, 6-57 or 6-59 of this part and in the event of his death, there shall be paid to his beneficiary, otherwise to his estate, the difference between the balance of his ac­ cumulated contributions at the time of his retirement and the retirement allowance paid or payable to him prior to death.
In lieu of this maximum allowance, he may elect to receive his retirement allowance under anyone of the optional plans described below, which shall be actuarially equivalent to the maximum allowance.
Option 1: The member may elect to receive a lesser retirement allow­ ance during his lifetime. At his retirement, there shall be established an amount of initial insurance which shall be computed on the basis of actuarial factors adopted by th