HB 2358: DLE; Law Enforcement Investigators; Adjutant General; Deputy Adjutant General; Fire Marshal; Deputy Fire Marshal; Director of Law Enforcement; Deputy Director of Law Enforcement; Employees' Retirement System; Allowances; Pension

A BILL FOR AN ACT

RELATING TO RETIREMENT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The purpose of this Act is to include certain law enforcement investigators as class A members of the employees' retirement system beginning July 1, 2026, and to provide continuation of retirement eligibility and benefits for certain members of part II of chapter 88, Hawaii Revised Statutes, defined within that were previously credited as class A or class B service.

     SECTION 2.  Section 88-21, Hawaii Revised Statutes, is amended as follows:

     1.  By adding six new definitions to be appropriately inserted and to read:

     ""Adjutant general" means a person appointed by the governor to regularly serve as the director of defense.

     "Deputy adjutant general" means a person appointed by the adjutant general to regularly serve as the deputy director of defense.

     "Deputy director of law enforcement" means a person appointed by the director of law enforcement to regularly serve as a deputy director of law enforcement.

     "Deputy fire marshal" means a person appointed by the fire marshal to regularly serve as the deputy state fire marshal of the office of the state fire marshal.

     "Director of law enforcement" means the person appointed by the governor to regularly serve as director of law enforcement.

"Fire marshal" means the person appointed by the state fire marshal selection commission to regularly serve as the administrator of the office of the state fire marshal."

     2.  By amending the definition of "law enforcement investigations staff investigators" to read:

     ""Law enforcement [investigations staff] investigators" means those employees in the [investigations staff office of the] department of law enforcement who have been conferred police powers by the director of law enforcement in accordance with section 353C-4 and are in [the] investigator positions [of investigator I to VII.].  "Law enforcement investigators" includes the chief investigator and chief special investigator positions effective July 1, 2026."

     SECTION 3.  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 law enforcement [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 law enforcement [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."

     SECTION 4.  Section 88-47, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There shall be four classes of members in the system to be known as class A, class B, class C, and class H, defined as follows:

     (1)  Class A shall consist of:

          (A)  Members first employed as judges before July 1, 2031, elected officials, and legislative officers;

          (B)  Investigators of the department of the attorney general, narcotics enforcement investigators, water safety officers not making the election under section 88-271, and law enforcement [investigations staff] investigators;

          (C)  Those members in service [prior to] before July 1, 1984, including those who are on approved leave of absence, not making the election to become a class C member as provided in part VII or to become a class H member as provided in part VIII;

          (D)  The following members in service [prior to] before July 1, 2006, including those who are on approved leave of absence, not making the election to become a class H member as provided in part VIII:

              (i)  Members whose salaries are set forth in sections 26-52 and 26-53 and their county counterparts, managing directors or an administrative assistant to the mayor, other county department heads, and agency heads appointed and subject to removal by the mayor;

             (ii)  First deputies appointed by the county attorney and prosecuting attorney;

            (iii)  The county clerk and deputy county clerk of each county;

             (iv)  The directors of the offices of council services of the county of Maui and the city and county of Honolulu;

              (v)  The administrative director of the courts;

             (vi)  The deputy administrative director of the courts;

            (vii)  The executive officer of the labor and industrial relations appeals board; and

           (viii)  The executive officer of the Hawaii labor relations board;

          (E)  All former class A retirants who return to employment after June 30, 1984, requiring the retirant's active membership; and

          (F)  All former class B retirants who return to employment requiring the retirant's active membership, except for:

              (i)  Former retirants who return in the positions of police officer or firefighter;

             (ii)  Former retirants who were members on July 1, 1957, who elected not to be covered by the Social Security Act; and

            (iii)  Former retirants who were in positions to which coverage under Title II of the Social Security Act was not extended who entered membership after June 30, 1957, but before January 1, 2004;

     (2)  Class B shall consist of:

          (A)  Police officers and firefighters, including former retirants who return to service in such capacity;

          (B)  All employees, including former retirants, who were members on July 1, 1957, who elected not to be covered by the Social Security Act; and

          (C)  All employees, including former retirants, in positions to which coverage under Title II of the Social Security Act is not extended, who enter membership after June 30, 1957, but before January 1, 2004, not making the election to become a class H member as provided in part VIII;

     (3)  Except for members described in paragraphs (1) and (2), class C shall consist of all employees, not making the election to become a class H member as provided in part VIII, who:

          (A)  First enter service after June 30, 1984, but before July 1, 2006;

          (B)  Reenter service after June 30, 1984, but before July 1, 2006, without vested benefit status as provided in section 88-96(b);

          (C)  Make the election to become a class C member as provided in part VII; or

          (D)  Are former class C retirants who return to service requiring the retirant's active membership; and

     (4)  Except for members described in paragraphs (1) and (2), class H shall consist of all employees who:

          (A)  First enter service after June 30, 2006;

          (B)  Reenter service after June 30, 2006, without vested benefit status as provided in section 88-96(b);

          (C)  Make the election to become a class H member as provided in part VIII;

          (D)  Are former class H retirants who return to service requiring the retirant's active membership; or

          (E)  Are first employed as a judge after June 30, 2031."

     SECTION 5.  Section 88-74, Hawaii Revised Statutes, is amended to read as follows:

     "§88-74  Allowance on service retirement.  (a)  Upon retirement from service, a member shall receive a maximum retirement allowance as provided in this section.

     (b)  If a member, who became a member before July 1, 2012, 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] before 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] before 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] before 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] before 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] before 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] before retirement are credited service as a law enforcement [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] 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] 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; and

     (9)  After June 30, 2026, if the member has at least ten years of credited service, of which the last five or more years before retirement are credited service as an:

          (A)  Adjutant general;

          (B)  Deputy adjutant general;

          (C)  Deputy director of law enforcement;

          (D)  Deputy fire marshal;

          (E)  Director of law enforcement; or

          (F)  Fire marshal,

          then the member would be entitled to have the years of service credited under paragraphs (1), (2), (3), (4), (5), (6), (7), and (8) to be calculated as provided in this subsection,

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 law enforcement [investigations staff] investigator, the retirement allowance shall be two and one-half per cent of the member's average final compensation[.]; provided that members with credited service as an adjutant general, deputy adjutant general, deputy director of law enforcement, deputy fire marshal, director of law enforcement, or fire marshal, would have each year of credited service as an adjutant general, deputy adjutant general, deputy director of law enforcement, deputy fire marshal, director of law enforcement, or fire marshal, the retirement allowance shall be two per cent of the member's average final compensation as computed under section 88-81(f).  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).] (f).

     (c)  If a member, who became a member [prior to] before July 1, 2012, has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

     (1)  For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (2)  For a member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (f);

     (3)  For a member who first earned credited service as a judge after June 30, 2012, for each year of credited service as a judge, three per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k);

     (4)  For a judge with other credited service, as provided in subsection (b).  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);] (f); or

     (5)  For a judge with credited service as an elective officer or as a legislative officer, as provided in subsection (d).

No allowance shall exceed seventy-five per cent of the member's average final compensation.  If the allowance exceeds this limit, it shall be adjusted by reducing the annuity included in paragraphs (1), (2), and (3) and the portion of the accumulated contributions specified in paragraphs (1), (2), and (3) in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  The allowance for judges under this subsection, together with the retirement allowance provided by the federal government for similar service, shall in no case exceed seventy-five per cent of the member's average final compensation.

     (d)  If a member, who became a member before July 1, 2012, has credited service as an elective officer or as a legislative officer, the member's retirement allowance shall be derived by adding the allowances computed separately under paragraphs (1), (2), (3), (4), (5), and (6) as follows:

     (1)  For a member who has credited service as an elective officer before July 1, 2012, irrespective of age, for each year of credited service as an elective officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (2)  For a member[,] who first earned credited service as an elective officer after June 30, 2012, irrespective of age, for each year of credited service as an elective officer, three per cent of the member's average final compensation as computed under section 88-81(e)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (3)  For a member who has credited service as a legislative officer before July 1, 2012, irrespective of age, for each year of credited service as a legislative officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (4)  For a member who first earned credited service as a legislative officer after June 30, 2012, irrespective of age, for each year of credited service as a legislative officer, three per cent of the member's average final compensation as computed under section 88-81(e)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (5)  If the member has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

          (A)  For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

          (B)  For a member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, and has attained the age of fifty-five, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (f);

          (C)  For a member who first earned credited service as a judge after June 30, 2012, but before July 1, 2031, and has attained the age of sixty, for each year of credited service as a judge, three per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k); and

          (D)  For a member who first earned credited service as a judge after June 30, 2031, and has attained the age of sixty, for each year of credited service as a judge, one and three-fourths per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k); and

     (6)  For each year of credited service not included in paragraph (1), (2), (3), (4), or (5), the average final compensation as computed under section 88-81(e)(4) shall be multiplied by two per cent for credited service earned as a class A or class H member, two and one-half per cent for credited service earned as a class B member, and one and one-quarter per cent for credited service earned as a class C member.  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).] (f).

The total retirement allowance shall not exceed seventy-five per cent of the member's highest average final compensation calculated under section 88-81(e)(1), (2), (3), or (4).  If the allowance exceeds this limit, it shall be adjusted by reducing any annuity accrued under paragraphs (1), (2), (3), (4), and (5) and the portion of the accumulated contributions specified in these paragraphs in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  If a member has service credit as an elective officer or as a legislative officer in addition to service credit as a judge, then the retirement benefit calculation contained in this subsection shall supersede the formula contained in subsection (c).

     [(e)] (f)  Except as provided in subsections (b), (c), [and] (d), and (e), if a member, who became a member before July 1, 2012, 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, law enforcement [investigations staff] investigator, sewer worker, or water safety officer, of which the last five or more years [prior to] before retirement is credited service in these capacities.

     [(f)] (g)  If a member, who becomes a member after June 30, 2012, 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] before 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] before 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] before 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] before 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] before retirement is credited service as a law enforcement [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 law enforcement [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).] (k).

     [(g)] (h)  If a member, who becomes a member after June 30, 2012, has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

     (1)  For each year of credited service as a judge, three per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k);

     (2)  For a judge with other credited service, as provided in subsection [(f).] (g).  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);] (k); and

     (3)  For a judge with credited service as an elective officer or as a legislative officer, as provided in subsection [(h).] (i).

No allowance shall exceed seventy-five per cent of the member's average final compensation.  If the allowance exceeds this limit, it shall be adjusted by reducing the annuity included in paragraph (1) and the portion of the accumulated contributions specified in paragraph (1) in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  The allowance for judges under this subsection, together with the retirement allowance provided by the federal government for similar service, shall in no case exceed seventy-five per cent of the member's average final compensation.

     [(h)] (i)  If a member, who becomes a member after June 30, 2012, has credited service as an elective officer or as a legislative officer, the member's retirement allowance shall be derived by adding the allowances computed separately under paragraphs (1), (2), (3), and (4) as follows:

     (1)  Irrespective of age, for each year of credited service as an elective officer, three per cent of the member's average final compensation as computed under section [88-81(f)(1),] 88-81(g)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (2)  Irrespective of age, for each year of credited service as a legislative officer, three per cent of the member's average final compensation as computed under section [88-81(f)(2),] 88-81(g)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (3)  For each year of credited service as a judge, three per cent of the member's average final compensation as computed under section [88‑81(f)(3),] 88-81(g)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k); and

     (4)  For each year of credited service not included in paragraph (1), (2), or (3), the average final compensation as computed under section [88-81(f)(4)] 88-81(g)(4) shall be multiplied by one and three-fourth per cent for credited service earned as a class A or class H member, two and one-fourth per cent for credited service earned as a class B member, and one and one‑fourth per cent for credited service earned as a class C member.  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).] (k).

The total retirement allowance shall not exceed seventy-five per cent of the member's highest average final compensation calculated under section [88-81(f)(1),] 88-81(g)(1), (2), (3), or (4).  If the allowance exceeds this limit, it shall be adjusted by reducing any annuity accrued under paragraphs (1), (2), and (3) and the portion of the accumulated contributions specified in these paragraphs in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  If a member has service credit as an elective officer or as a legislative officer in addition to service credit as a judge, then the retirement benefit calculation contained in this subsection shall supersede the formula contained in subsection [(g).] (h).

     (j)  If a member, who became a member after June 30, 2012, has credited service as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal, the member's retirement allowance shall be derived by adding the allowances computed separately as follows:

     (1)  For a member who has credited service as a firefighter, police officer, or investigator of the department of the prosecuting attorney after June 30, 2012, for each year of credited service as a firefighter, police officer, or investigator of the department of the prosecuting attorney, two and one-quarter per cent of the member's average final compensation;

     (2)  For a member who has credited service as a corrections officer after June 30, 2012, for each year of credited service as a corrections officer, two and one-quarter per cent of the member's average final compensation;

     (3)  For a member who has credited service as an investigator of the department of the attorney general after June 30, 2012, for each year of credited service as an investigator of the department of the attorney general, two and one-quarter per cent of the member's average final compensation;

     (4)  For a member who has credited service as a narcotics enforcement investigator after June 30, 2012, for each year of credited service as a narcotics enforcement investigator, two and one-quarter per cent of the member's average final compensation;

     (5)  For a member who has credited service as a law enforcement investigator after June 30, 2012, for each year of credited service as a law enforcement investigator, two and one-quarter per cent of the member's average final compensation;

     (6)  For a member who has credited service as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal, for each year of credited service as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal, one and three-fourths per cent of the member's average final compensation; and

     (7)  For each year of credited service not included in paragraph (1), (2), (3), (4), (5), or (6), the average final compensation calculated under section 88-81(b) (1), (2), or (3) shall be multiplied by one and three-fourths 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 (k).

     [(i)] (k)  Except as provided in subsections [(f),] (g), [and] (h), (i), and (j), if a member, who becomes a member after June 30, 2012, 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, law enforcement [investigations staff] investigator, sewer worker, water safety officer, or emergency medical technician, of which the last five or more years [prior to] before retirement is credited service in these capacities."

     SECTION 6.  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)] 88-74(f) 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, 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] before 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 7.  Section 88-76, Hawaii Revised Statutes, is amended to read as follows:

     "§88-76  Allowance on ordinary disability retirement.  Upon retirement for ordinary disability, a member shall receive a maximum retirement allowance of one and three-fourths per cent of the member's average final compensation for each year of credited service; except that for each year of credited service as a judge, an elective officer, or a legislative officer, the member shall receive a maximum retirement allowance computed as provided in section 88-74(c), (d), [(g), or] (h), or (i), as applicable.  The minimum retirement allowance payable under this section shall be thirty per cent of the member's average final compensation."

     SECTION 8.  Section 88-81, Hawaii Revised Statutes, is amended to read as follows:

     "§88-81  Average final compensation.  (a)  Average final compensation is the average annual compensation, pay, or salary upon which a member has made contributions as required by parts II, VII, and VIII of this chapter.

     (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 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.

     (c)  In computing the compensation of a judge, the compensation paid to the judge by the United States as well as by the Territory shall be included.

     (d)  For service rendered as a member of the legislature from and after November 5, 1968, the actual annual salary of a member shall be the only amount used for determining the member's average final compensation.  For service rendered as a member of the legislature prior to November 5, 1968, and after admission of this State into the Union, the annual compensation of a member shall be computed, for the purpose of determining the member's average final compensation, as follows:

     (1)  During a year in which a general session was held, it shall be deemed to have been an amount equal to four times the salary of a member of the legislature for a general session; and

     (2)  During a year in which a budget session was held, it shall be deemed to have been 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 admission 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 the member's term of office.

     (e)  If a member, who became a member before July 1, 2012, has credited service rendered as an elective officer or as a legislative officer, the member's average final compensation shall be computed separately for each category of service as follows:

     (1)  For the three highest paid years of credited service as an elective officer, or if the member has fewer than three years of credited service in that capacity, then the member's actual years of credited service;

     (2)  For the three highest paid years of credited service as a legislative officer, or if the member has fewer than three years of credited service in that capacity, then the member's actual years of credited service;

     (3)  For the three highest paid years of credited service as a judge, or if the member has fewer than three years of credited service in that capacity, then the member's actual years of credited service; and

     (4)  For the three highest paid years of credited service not included in paragraph (1), (2), or (3), or if the member has fewer than three years of credited service in that capacity, then the member's actual years of credited service.

     (f)  If a member, who became a member before July 1, 2012, has credited service rendered as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal, the member's average final compensation for that credited service shall be computed as the three highest paid years of credited service, or if the member has fewer than three years of credited service in that capacity, then the member's actual years of credited service, as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal;

     [(f)] (g)  If a member, who becomes a member after June 30, 2012, has credited service rendered as an elective officer or as a legislative officer, the member's average final compensation shall be computed separately for each category of service as follows:

     (1)  For the five highest paid years of credited service as an elective officer, or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service;

     (2)  For the five highest paid years of credited service as a legislative officer, or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service;

     (3)  For the five highest paid years of credited service as a judge, or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service; and

     (4)  For the five highest paid years of credited service not included in paragraph (1), (2), or (3), or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service.

     (h)  If a member, who becomes a member after June 30, 2012, has credited service rendered as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal, the member's average final compensation shall be computed separately for each category of service as follows:

     (1)  For the five highest paid years of credited service as the adjutant general, deputy adjutant general, director of law enforcement, deputy director of law enforcement, fire marshal, or deputy fire marshal, or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service;

     (2)  For the five highest paid years of credited service as a firefighter, police officer, investigator of the department of the prosecuting attorney, corrections officer, investigator of the department of the attorney general, narcotics enforcement investigator, or law enforcement investigator, or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service; and

     (3)  For the five highest paid years of credited service not included in paragraph (1) or (2), or if the member has fewer than five years of credited service in that capacity, then the member's actual years of credited service."

     SECTION 9.  This Act does not affect the rights and duties that matured or were vested, penalties that were incurred, and proceedings that were begun before its effective date, including but not limited to any membership in the employees' retirement system that was terminated, credited service that was forfeited, retirement that was finalized, or benefits that were paid.

     SECTION 10.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 11.  This Act shall take effect upon its approval.

Report Title:

DLE; Law Enforcement Investigators; Adjutant General; Deputy Adjutant General; Fire Marshal; Deputy Fire Marshal; Director of Law Enforcement; Deputy Director of Law Enforcement; Employees' Retirement System; Allowances; Pension

Description:

Includes the Chief Investigator and Chief Special Investigator of the Department of Law Enforcement as class A members of the pension and retirement system.  Establishes guidance for the computation of retirement benefits for the Adjutant General, Deputy Adjutant General, Fire Marshal, and Deputy Fire Marshal.  (HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO RETIREMENT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 88-21, Hawaii Revised Statutes, is amended as follows:

     1.  By adding four new definitions to be appropriately inserted and to read:

     ""Chief investigator" means a person regularly employed by the department of law enforcement who has been conferred police powers by the director of law enforcement in accordance with section 353C-4 and is in the position of chief investigator.

     "Chief special investigator" means a person regularly employed by the department of law enforcement who has been conferred police powers by the director of law enforcement in accordance with section 353C-4 and is in the position of chief special investigator.

     "Deputy director for law enforcement" means a person appointed by the director of law enforcement to regularly serve as a deputy director of the department of law enforcement.

     "Director of law enforcement" means the person appointed by the governor to regularly serve as director of the department of law enforcement."

     2.  By amending the definition of "law enforcement investigations staff investigators" to read:

     ""Law enforcement investigations staff investigators" means those employees in the [investigations staff office of the] department of law enforcement who have been conferred police powers by the director of law enforcement in accordance with section 353C-4 and are in the positions of investigator I to VII."

     SECTION 2.  Section 88-42.6, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§88-42.6[]]  Membership of elective officers.  (a)  An elective officer shall be a member of the employees' retirement system; provided that an elective officer [shall have a one-time election] may elect to be excluded from membership in the employees' retirement system.

     (b)  [Unless the elective officer is a member of the system, a former member of the system, or a retirant, an] An elective officer shall make the election to be excluded from membership in the system no later than thirty days following the elective officer's taking office[.  The election shall be irrevocable.] after each election for office.  If the elective officer fails to make an election to be excluded from membership in the system within the period allowed for making the election, the elective officer shall become a member effective as of the date the elective officer takes office.

     (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); or

     (2)  Has been retired for at least twelve consecutive months [prior to] before 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) shall not be eligible for membership in the system while serving as an elective officer."

     SECTION 3.  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] law enforcement investigations staff investigators, chief investigator, and chief special investigator 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] law enforcement investigations staff investigators, chief investigator, and chief special investigator 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."

     SECTION 4.  Section 88-47, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There shall be four classes of members in the system to be known as class A, class B, class C, and class H, defined as follows:

     (1)  Class A shall consist of:

          (A)  Members first employed as judges before July 1, 2031, elected officials, and legislative officers;

          (B)  Investigators of the department of the attorney general, narcotics enforcement investigators, water safety officers not making the election under section 88-271, and law enforcement investigations staff investigators;

          (C)  Those members in service [prior to] before July 1, 1984, including those who are on approved leave of absence, not making the election to become a class C member as provided in part VII or to become a class H member as provided in part VIII;

          (D)  The following members in service [prior to] before July 1, 2006, including those who are on approved leave of absence, not making the election to become a class H member as provided in part VIII:

              (i)  Members whose salaries are set forth in sections 26-52 and 26-53 and their county counterparts, managing directors or an administrative assistant to the mayor, other county department heads, and agency heads appointed and subject to removal by the mayor;

             (ii)  First deputies appointed by the county attorney and prosecuting attorney;

            (iii)  The county clerk and deputy county clerk of each county;

             (iv)  The directors of the offices of council services of the county of Maui and the city and county of Honolulu;

              (v)  The administrative director of the courts;

             (vi)  The deputy administrative director of the courts;

            (vii)  The executive officer of the labor and industrial relations appeals board; and

           (viii)  The executive officer of the Hawaii labor relations board;

          (E)  All former class A retirants who return to employment after June 30, 1984, requiring the retirant's active membership; [and]

          (F)  All former class B retirants who return to employment requiring the retirant's active membership, except for:

              (i)  Former retirants who return in the positions of police officer or firefighter;

             (ii)  Former retirants who were members on July 1, 1957, who elected not to be covered by the Social Security Act; and

            (iii)  Former retirants who were in positions to which coverage under Title II of the Social Security Act was not extended who entered membership after June 30, 1957, but before January 1, 2004; and

          (G)  The following members of the department of law enforcement, effective July 1, 2026:

              (i)  The chief investigator; and

             (ii)  The chief special investigator;

     (2)  Class B shall consist of:

          (A)  Police officers and firefighters, including former retirants who return to service in such capacity;

          (B)  All employees, including former retirants, who were members on July 1, 1957, who elected not to be covered by the Social Security Act; and

          (C)  All employees, including former retirants, in positions to which coverage under Title II of the Social Security Act is not extended, who enter membership after June 30, 1957, but before January 1, 2004, not making the election to become a class H member as provided in part VIII;

     (3)  Except for members described in paragraphs (1) and (2), class C shall consist of all employees, not making the election to become a class H member as provided in part VIII, who:

          (A)  First enter service after June 30, 1984, but before July 1, 2006;

          (B)  Reenter service after June 30, 1984, but before July 1, 2006, without vested benefit status as provided in section 88-96(b);

          (C)  Make the election to become a class C member as provided in part VII; or

          (D)  Are former class C retirants who return to service requiring the retirant's active membership; and

     (4)  Except for members described in paragraphs (1) and (2), class H shall consist of all employees who:

          (A)  First enter service after June 30, 2006;

          (B)  Reenter service after June 30, 2006, without vested benefit status as provided in section 88-96(b);

          (C)  Make the election to become a class H member as provided in part VIII;

          (D)  Are former class H retirants who return to service requiring the retirant's active membership; or

          (E)  Are first employed as a judge after June 30, 2031."

     SECTION 5.  Section 88-74, Hawaii Revised Statutes, is amended to read as follows:

     "§88-74  Allowance on service retirement.  (a)  Upon retirement from service, a member shall receive a maximum retirement allowance as provided in this section.

     (b)  If a member, who became a member before July 1, 2012, 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] before 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] before 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] before 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] before 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] before 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] before retirement are credited service as a law enforcement 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] 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] 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; and

     (9)  Notwithstanding section 88-99, after June 30, 2026, if the member has at least ten years of credited service, of which the last five or more years before retirement are credited service as chief investigator or chief special investigator;

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] law enforcement investigations staff investigator, chief investigator, or chief special 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).] (f).

     (c)  If a member, who became a member [prior to] before July 1, 2012, has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

     (1)  For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (2)  For a member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (f);

     (3)  For a member who first earned credited service as a judge after June 30, 2012, for each year of credited service as a judge, three per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k);

     (4)  For a judge with other credited service, as provided in subsection (b).  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);] (f); or

     (5)  For a judge with credited service as an elective officer or as a legislative officer, as provided in subsection (d).

No allowance shall exceed seventy-five per cent of the member's average final compensation.  If the allowance exceeds this limit, it shall be adjusted by reducing the annuity included in paragraphs (1), (2), and (3) and the portion of the accumulated contributions specified in paragraphs (1), (2), and (3) in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  The allowance for judges under this subsection, together with the retirement allowance provided by the federal government for similar service, shall in no case exceed seventy-five per cent of the member's average final compensation.

     (d)  If a member, who became a member before July 1, 2012, has credited service as an elective officer or as a legislative officer, the member's retirement allowance shall be derived by adding the allowances computed separately under paragraphs (1), (2), (3), (4), (5), and (6) as follows:

     (1)  For a member who has credited service as an elective officer before July 1, 2012, irrespective of age, for each year of credited service as an elective officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (2)  For a member, who first earned credited service as an elective officer after June 30, 2012, irrespective of age, for each year of credited service as an elective officer, three per cent of the member's average final compensation as computed under section 88-81(e)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (3)  For a member who has credited service as a legislative officer before July 1, 2012, irrespective of age, for each year of credited service as a legislative officer, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (4)  For a member who first earned credited service as a legislative officer after June 30, 2012, irrespective of age, for each year of credited service as a legislative officer, three per cent of the member's average final compensation as computed under section 88-81(e)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (5)  If the member has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

          (A)  For a member who has credited service as a judge before July 1, 1999, irrespective of age, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

          (B)  For a member who first earned credited service as a judge after June 30, 1999, but before July 1, 2012, and has attained the age of fifty-five, for each year of credited service as a judge, three and one-half per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (f);

          (C)  For a member who first earned credited service as a judge after June 30, 2012, but before July 1, 2031, and has attained the age of sixty, for each year of credited service as a judge, three per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k); and

          (D)  For a member who first earned credited service as a judge after June 30, 2031, and has attained the age of sixty, for each year of credited service as a judge, one and three-fourths per cent of the member's average final compensation as computed under section 88-81(e)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k); and

     (6)  For each year of credited service not included in paragraph (1), (2), (3), (4), or (5), the average final compensation as computed under section 88-81(e)(4) shall be multiplied by two per cent for credited service earned as a class A or class H member, two and one-half per cent for credited service earned as a class B member, and one and one-quarter per cent for credited service earned as a class C member.  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).] (f).

The total retirement allowance shall not exceed seventy-five per cent of the member's highest average final compensation calculated under section 88-81(e)(1), (2), (3), or (4).  If the allowance exceeds this limit, it shall be adjusted by reducing any annuity accrued under paragraphs (1), (2), (3), (4), and (5) and the portion of the accumulated contributions specified in these paragraphs in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  If a member has service credit as an elective officer or as a legislative officer in addition to service credit as a judge, then the retirement benefit calculation contained in this subsection shall supersede the formula contained in subsection (c).

     (e)  Notwithstanding section 88-99, if a member, who became a member before July 1, 2012, has credited service as the director of law enforcement or deputy director of the department of law enforcement, the member's retirement allowance shall be derived by adding the allowances computed separately as follows:

     (1)  For a member who has credited service as a police officer after June 30, 1968, for each year of credited service as a police officer, two and one-half per cent of the member's average final compensation;

     (2)  For a member who has credited service as an investigator of the department of the attorney general after June 16, 1981, for each year of credited service as an investigator of the department of the attorney general, two and one-half per cent of the member's average final compensation;

     (3)  For a member who has credited service as a narcotics enforcement investigator after June 30, 1989, for each year of credited service as a narcotics enforcement investigator, two and one-half per cent of the member's average final compensation;

     (4)  For a member who has credited service as a law enforcement investigations staff investigator after June 30, 1994, for each year of credited service as a law enforcement investigations staff investigator, two and one-half per cent of the member's average final compensation;

     (5)  For a member who has credited service as the director of law enforcement or deputy director of the department of law enforcement, for each year of credited service as the director of law enforcement or deputy director of the department of law enforcement, two per cent of the member's average final compensation; and

     (6)  For each year of credited service not included in paragraph (1), (2), (3), (4), or (5), the average final compensation calculated under section 88-81(b)(1), (2), or (3) shall be multiplied by two per cent for credited service earned as a class A or class H member and one and one-quarter per cent for credited service earned as a class C member.  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 (f).

     [(e)] (f)  Except as provided in subsections (b), (c), [and] (d), and (e), if a member, who became a member before July 1, 2012, 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, law enforcement investigations staff investigator, chief investigator, chief special investigator, sewer worker, or water safety officer, of which the last five or more years [prior to] before retirement is credited service in these capacities.

     [(f)] (g)  If a member, who becomes a member after June 30, 2012, 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] before 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] before 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] before 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] before 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] before retirement is credited service as a law enforcement investigations staff investigator;

     (6)  After June 30, 2026, if the member has at least ten years of credited service, of which the last five or more years before retirement is credited service as a chief investigator or chief special investigator;

    [(6)] (7)  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)] (8)  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] law enforcement investigations staff investigator, chief investigator, or chief special 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).] (k).

     [(g)] (h)  If a member, who becomes a member after June 30, 2012, has credited service as a judge, the member's retirement allowance shall be computed on the following basis:

     (1)  For each year of credited service as a judge, three per cent of the member's average final compensation in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k);

     (2)  For a judge with other credited service, as provided in subsection [(f).] (g).  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);] (k); and

     (3)  For a judge with credited service as an elective officer or as a legislative officer, as provided in subsection [(h).] (i).

No allowance shall exceed seventy-five per cent of the member's average final compensation.  If the allowance exceeds this limit, it shall be adjusted by reducing the annuity included in paragraph (1) and the portion of the accumulated contributions specified in paragraph (1) in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  The allowance for judges under this subsection, together with the retirement allowance provided by the federal government for similar service, shall in no case exceed seventy-five per cent of the member's average final compensation.

     [(h)] (i)  If a member, who becomes a member after June 30, 2012, has credited service as an elective officer or as a legislative officer, the member's retirement allowance shall be derived by adding the allowances computed separately under paragraphs (1), (2), (3), and (4) as follows:

     (1)  Irrespective of age, for each year of credited service as an elective officer, three per cent of the member's average final compensation as computed under section 88-81(f)(1), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (2)  Irrespective of age, for each year of credited service as a legislative officer, three per cent of the member's average final compensation as computed under section 88-81(f)(2), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service;

     (3)  For each year of credited service as a judge, three per cent of the member's average final compensation as computed under section 88‑81(f)(3), in addition to an annuity that is the actuarial equivalent of the member's accumulated contributions allocable to the period of service.  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);] (k); and

     (4)  For each year of credited service not included in paragraph (1), (2), or (3), the average final compensation as computed under section 88-81(f)(4) shall be multiplied by one and three-fourth per cent for credited service earned as a class A or class H member, two and one-fourth per cent for credited service earned as a class B member, and one and one‑fourth per cent for credited service earned as a class C member.  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).] (k).

The total retirement allowance shall not exceed seventy-five per cent of the member's highest average final compensation calculated under section 88-81(f)(1), (2), (3), or (4).  If the allowance exceeds this limit, it shall be adjusted by reducing any annuity accrued under paragraphs (1), (2), and (3) and the portion of the accumulated contributions specified in these paragraphs in excess of the requirements of the reduced annuity shall be returned to the member upon the member's retirement or paid to the member's designated beneficiary upon the member's death while in service or while on authorized leave without pay.  If a member has service credit as an elective officer or as a legislative officer in addition to service credit as a judge, then the retirement benefit calculation contained in this subsection shall supersede the formula contained in subsection [(g).] (h).

     (j)  If a member, who became a member after June 30, 2012, has credited service as the director of law enforcement or deputy director of the department of law enforcement, the member's retirement allowance shall be derived by adding the allowances computed separately as follows:

     (1)  For a member who has credited service as a police officer after June 30, 2012, for each year of credited service as a police officer, two and one-quarter per cent of the member's average final compensation;

     (2)  For a member who has credited service as an investigator of the department of the attorney general after June 30, 2012, for each year of credited service as an investigator of the department of the attorney general, two and one-quarter per cent of the member's average final compensation;

     (3)  For a member who has credited service as a narcotics enforcement investigator after June 30, 2012, for each year of credited service as a narcotics enforcement investigator, two and one-quarter per cent of the member's average final compensation;

     (4)  For a member who has credited service as a law enforcement investigations staff investigator after June 30, 2012, for each year of credited service as a law enforcement investigations staff investigator, two and one-quarter per cent of the member's average final compensation;

     (5)  For a member who has credited service as the director of law enforcement or deputy director of the department of law enforcement, for each year of credited service as the director of law enforcement or deputy director of the department of law enforcement, one and three-fourths per cent of the member's average final compensation; and

     (6)  For each year of credited service not included in paragraph (1), (2), (3), (4), or (5), the average final compensation calculated under section 88‑81(b)(1), (2), or (3) shall be multiplied by one and three-fourths 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 (k).

     [(i)] (k)  Except as provided in subsections [(f),] (g), [and] (h), (i) and (j), if a member, who becomes a member after June 30, 2012, 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, law enforcement investigations staff investigator, chief investigator, chief special investigator, sewer worker, water safety officer, or emergency medical technician, of which the last five or more years [prior to] before retirement is credited service in these capacities."

     SECTION 6.  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)] 88-74(f) 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, 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] before 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 7.  Section 88-76, Hawaii Revised Statutes, is amended to read as follows:

     "§88-76  Allowance on ordinary disability retirement.  Upon retirement for ordinary disability, a member shall receive a maximum retirement allowance of one and three-fourths per cent of the member's average final compensation for each year of credited service; except that for each year of credited service as a judge, an elective officer, or a legislative officer, the member shall receive a maximum retirement allowance computed as provided in section 88-74(c), (d), [(g), or] (h), or (i), as applicable.  The minimum retirement allowance payable under this section shall be thirty per cent of the member's average final compensation."

     SECTION 8.  This Act does not affect the rights and duties that matured or were vested, penalties that were incurred, and proceedings that were begun before its effective date, including but not limited to any membership that was terminated, credited service that was forfeited, retirement that was finalized, or benefits that were paid.

     SECTION 9.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 10.  This Act shall take effect upon its approval.

Report Title:

DLE; Elective Officers; Membership; Employees' Retirement System; Allowances; Pension

Description:

Provides elective officers with the choice to be members of the Employees' Retirement System after each election.  Repeals the condition that a choice to be excluded from the Employees' Retirement System is irrevocable and such choice may only be made once.  Includes the Chief Investigator and Chief Special Investigator of the Department of Law Enforcement as class A members of the pension and retirement system.  Establishes guidance for the computation of retirement benefits for the Chief Investigator, Chief Special Investigator, Director of Law Enforcement, and Deputy Directors of Law Enforcement.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to retirement.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 88-42.6, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§88-42.6[]]  Membership of elective officers.  (a)  An elective officer shall be a member of the employees' retirement system; provided that an elective officer [shall have a one-time election] may elect to be excluded from membership in the employees' retirement system.

     (b)  [Unless the elective officer is a member of the system, a former member of the system, or a retirant, an] An elective officer shall make the election to be excluded from membership in the system no later than thirty days following the elective officer's taking office[.  The election shall be irrevocable.] after each election for office.  If the elective officer fails to make an election to be excluded from membership in the system within the period allowed for making the election, the elective officer shall become a member effective as of the date the elective officer takes office.

     (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); 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) shall not be eligible for membership in the system while serving as an elective officer."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

Elective Officers; Membership; Employees' Retirement System

Description:

Provides elective officers with the choice to be members of the Employees' Retirement System after each election.  Repeals the condition that a choice to be excluded from the Employees' Retirement System is irrevocable and such choice may only be made once.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  1163-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 2358

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 2358, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO RETIREMENT,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Provide elective officers with the choice to be excluded from membership in the Employees' Retirement System after each election, rather than making a one-time irrevocable choice after taking office;

     (2)  Include the Chief Investigator and Chief Special Investigator of the Department of Law Enforcement as class A members of the pension and retirement system; and

     (3)  Establish guidance for the computation of retirement benefits for the Chief Investigator, Chief Special Investigator, Director of Law Enforcement, and Deputy Directors of Law Enforcement.

     Your Committee received testimony in support of this measure from the Office of the Governor and Department of Law Enforcement.  Your Committee received testimony in opposition to this measure from the Legislative Committee of the Board of Trustees of the Employees' Retirement System.   

     Your Committee has amended this measure by:

     (1)  Adding a brief preamble;

     (2)  Clarifying that the Chief Investigator and Chief Special Investigator of the Department of Law Enforcement are included in the definition of "law enforcement investigators" as class A members of the pension and retirement system;

     (3)  Removing the provisions that provided elective officers with the choice to be excluded from membership in the Employees' Retirement System after each election, rather than making a one-time irrevocable choice after taking office;

     (4)  Including the Adjutant General, Deputy Adjutant General, Fire Marshal, and Deputy Fire Marshal as class A members of the pension and retirement system;

     (5)  Establishing the retirement allowance for Tier 1 members that, after June 30, 2026, have at least ten years of credited service, of which the last five or more years before retirement are served as Adjutant General, Deputy Adjutant General, Director of Law Enforcement, Deputy Director of Law Enforcement, Fire Marshal, or Deputy Fire Marshal at two percent of average final compensation for each year of credited service in those positions;

     (6)  Including the Adjutant General, Deputy Adjutant General, Fire Marshal, and Deputy Fire Marshal within the same Tier 2 benefit computation structure as the Director of Law Enforcement and Deputy Director of Law Enforcement; and

     (7)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2358, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2358, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

STAND. COM. REP. NO.  641-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 2358

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Labor, to which was referred H.B. No. 2358 entitled:

"A BILL FOR AN ACT RELATING TO RETIREMENT,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Provide elective officers with the choice, after each election, to be members of the Employees' Retirement System; and

     (2)  Repeal the restriction that the elective officer's choice once made is irrevocable.

     Your Committee received testimony in support of this measure from the Office of the Governor and one individual.  Your Committee received comments on this measure from the Board of Trustees' of the Employees' Retirement System.

     Your Committee finds that existing law restricts elective officers to a single, irrevocable decision regarding membership in the Employees' Retirement System, even though changes in personal, financial, or professional circumstances may warrant a different choice after subsequent elections.  This lack of flexibility can create inequities by locking officers into decisions made early in their public service careers, particularly as retirement rules, financial conditions, or service patterns evolve.  This measure will provide needed flexibility and ensure that retirement choices align more closely with an officer's present circumstances.

     Your Committee further finds that including certain employees of the Department of Law Enforcement in the Class A retirement plan is important to support recruitment, retention, and parity among the State's law enforcement workforce, and to ensure that employees who have accrued enhanced retirement benefits are able to retain those benefits when advancing into leadership roles.

     Accordingly, your Committee has amended this measure by:

     (1)  Defining "Chief Investigator", "Chief Special Investigator", "Deputy Director of Law Enforcement"; and "Director of Law Enforcement" and clarifying the definition of "law enforcement investigations staff investigators";

     (2)  Including the Chief Investigator and Chief Special Investigator within the higher public safety employee contribution rate structure;

     (3)  Including the Chief Investigator and Chief Special Investigator of the Department of Law Enforcement as class A members of the pension and retirement system;

     (4)  Including the Chief Investigator and Chief Special Investigator within the enhanced retirement allowance provisions applicable to certain law enforcement and subject to service requirements;

     (5)  Establishing retirement benefit computations for the Chief Investigator, Chief Special Investigator, Director of Law Enforcement, and Deputy Directors of Law Enforcement;

     (6)  Inserting a savings clause; and

     (7)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2358, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2358, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor,