Sunday, February 5, 2023
Hawai'i Free Press

Current Articles | Archives

Wednesday, December 29, 2010
2011 Legislative Agenda: ERS benefits to be slashed, “all eligible members to retire”
By Andrew Walden @ 9:59 PM :: 8184 Views :: Energy, Environment

by Andrew Walden

Hawai has an unfunded pension liability to the government Employees Retirement System estimated by the American Legislative Exchange Council in excess of $5 billion dollars.  But a September 9, 2010 Procurement exemption request filed by State vendor KMH LLP suggests that liability will be cut by reducing benefits during the 2011 legislative session.

The State’s Chief Procurement Officer October 5 denied KMH’s request for exemption from competitive bidding.  But the description of its contract proposal is revealing nonetheless.  In a contract which was to run from September 15, 2010 through January 1, 2011, KMH was, “To conduct diagnostic process review of the entire retirant pension benefit payment process from the initial application to computation of final benefit payment calculation.”

KHM explains the failings of the current benefit calculation system:

When an ERS member retires, the retirant receives an estimated benefit until the retirant’s benefits are ‘finalized’ – ie the actual benefit is determined….  At the present time, most finalizations take more than six months.

At this time there are over 3,000 benefit files to be finalized.  there were 317 retirements on June 1, 2009 whereas in recent years there have been an average of 60 retirements in June.  Each year an estimate of approx. 1,600-1,800 members retire from the State and counties….

Some have been waiting up to 2 years to be finalized.

Of course, this is typical of may State offices.  But the inefficiency creates a looming problem for KMH and the other company contracted to ‘finalize’ benefits:

In addition because of the economic conditions, pension funds (public and private) globally are looking into benefit changes.  The ERS is also taking a hard look into making statutory changes in the 2011 legislative session.  As such this will have a dramatic impact on the ERS as all members eligible to retire will secure their benefits by taking early retirement whether they are ready to retire or not.

And how does KMH’s study fit into this process?

The ERS Board of trustees has directed staff to engage a consultant to review the finals process and to make recommendations to make the final processing more efficient and to improve it to meet best practices.  The recommendations may include statutory as well as procedural changes…

Time is of the essence in this matter so that any recommended statutory changes can be proposed in the 2011 legislative session.

Although the surge would boost pension outlays, the reduction in benefits would reduce the ERS' unfunded liability.  Any net attrition allowed to occur after the departure of so many government employees would allow for expenses to be reduced dramatically in these tough budget times. 

---30---

PDF: KMH Procurement Exemption request    

RELATED:

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT