Bill Text: HI HB2491 | 2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Employer-Union Health Benefits Trust Fund; Other Post-Employment Benefits Trust

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2012-07-10 - (S) Act 304, 7/9/2012 (Gov. Msg. No. 1421). [HB2491 Detail]

Download: Hawaii-2012-HB2491-Amended.html

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STAND. COM. REP. NO.  329-12

 

Honolulu, Hawaii

                , 2012

 

RE:   H.B. No. 2491

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

 

Sir:

 

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 2491 entitled:

 

"A BILL FOR AN ACT RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND,"

 

begs leave to report as follows:

 

     The purpose of this measure is to ensure that the Hawaii Employer-Union Health Benefits Trust Fund meets the requirements of the Government Accounting Standards Board regarding other post employment benefits trusts.  Specifically, this measure authorizes the Board of Trustees of the Hawaii Employer-Union Health Benefits Trust Fund to create a trust fund for the purpose of receiving employer contributions that will prefund post-employment health and other benefit costs for retirees and their beneficiaries.

 

     The Department of the Attorney General, Department of Budget and Finance, Administrator of the Hawaii Employer-Union Health Benefits Trust Fund, Department of Budget and Fiscal Services of the City and County of Honolulu, Department of Human Resources of the City and County of Honolulu, and Hawaii State Teachers Association testified in support of this measure.

 

     A recent audit of the Hawaii Employer-Union Health Benefits Trust Fund found that the Trust Fund does not currently meet the requirements of the Government Accounting Standards Board regarding other post-employment benefits trusts.  Other post employment benefits include various non-pension benefits, such as health care, which are provided to retirees.  According to the Government Accounting Standards Board, other post employment benefits trusts must have the specific criteria of irrevocability of contributions, dedication of plan assets to paying benefits in accordance with the plan, and legal protection of the plan assets from creditors.  While the State has taken the position that there is no requirement or obligation to pre-fund retiree health and other post-employment benefits, pre-funding these benefit liabilities through a trust meeting the Government Accounting Standards Board requirements allows a public employer to use a higher discount rate when calculating its unfunded liability, which results in a reduction in the amount of other post-employment benefits liability in the employer's financial statements.

 

     However, it is not the intent of your Committee that this measure be construed to require public employers to make any particular level of contributions to pre-fund other post-employment benefits.  As such, your Committee has amended this measure by explicitly stating that this measure is not meant to bind or require the State or counties to make any particular level of contributions to the Hawaii Employer-Union Health Benefits Trust Fund now or in the future, but only to authorize the Trust Fund to create a separate trust fund for the purpose of receiving such contributions that meets the requirements of the Government Accounting Standards Board regarding health and other post-employment benefits trusts.

 

     Technical, nonsubstantive amendments have also been made for clarity, consistency, and style.

 

     As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2491, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2491, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

 

 

		____________________________ KARL RHOADS, Chair