RELATING TO DEFERRED RETIREMENT FOR POLICE.

HB406

HOUSE OF REPRESENTATIVES

H.B. NO.

406

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO DEFERRED RETIREMENT FOR POLICE
.

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

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SECTION 1.
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The
legislature finds that the recruitment and retention of police officers has
been difficult for counties and their respective police departments.
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The implementation of a deferred retirement
option program would incentivize qualified police officers to continue working
beyond the requisite twenty‑five years of service and to carry on
protecting and serving the community.
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A
deferred retirement option program has been increasingly utilized in many other
states and municipalities as an incentive for quality workers to delay
retirement.

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The purpose of this Act is to establish a
deferred retirement option program for police and to provide a retention tool
for county police departments to incentivize qualified officers who are
eligible for retirement to continue working.

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SECTION
2
.
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Section 88-9, Hawaii Revised Statutes, is
amended as follows:

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1.
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By
amending subsection (a) to read:

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"(a)
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[
A
]
Except for police officers enrolled in the deferred
retirement option program, a
retirant may not be employed by the State or
by any county unless the retirant is reenrolled in the system pursuant to this
chapter, or unless the employment, without reenrollment, is authorized by this
section.
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A retirant whose employment
without reenrollment in the system is authorized by this section shall acquire
no service credit or retirement rights under this chapter with respect to the
employment and shall not be considered to be in service for purposes of this
chapter."

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2.
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By amending subsection (d) to read:

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"
(d)
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A retirant may be employed without
reenrollment in the system and suffer no loss or interruption of benefits
provided by the system or under chapter 87A if the retirant is employed:

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(1)
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As an elective officer pursuant to
section 88-42.6(c) or as a member of the legislature pursuant to section 88-73(d);

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(2)
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As a juror or precinct official;

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(3)
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As a part-time or temporary employee
excluded from membership in the system pursuant to section 88-43, as a session
employee excluded from membership in the system pursuant to section 88-54.2, as
the president and chief executive officer of the Hawaii tourism authority
excluded from membership in the system pursuant to section 201B-2, or as any
other employee expressly excluded by law from membership in the system;
provided that:

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(A)
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The retirant was not employed by the
State or a county during the six calendar months prior to the first day of
reemployment; and

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(B)
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No agreement was entered into between
the State or a county and the retirant, prior to the retirement of the
retirant, for the return to work by the retirant after retirement;

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(4)
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In a position identified by the
appropriate jurisdiction as a labor shortage or difficult-to-fill position;
provided that:

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(A)
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The retirant was not employed by the
State or a county during the twelve calendar months prior to the first day of
reemployment;

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(B)
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No agreement was entered into between
the State or a county and the retirant, prior to the retirement of the
retirant, for the return to work by the retirant after retirement; and

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(C)
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Each employer shall contribute to the
pension accumulation fund the required percentage of the rehired retirant's
compensation to amortize the system's unfunded actuarial accrued liability; [
or
]

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(5)
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As a teacher or an administrator in a
teacher shortage area identified by the department of education or in a charter
school or as a mentor for new classroom teachers; provided that:

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(A)
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The retirant was not employed by the
State or a county during the twelve calendar months prior to the first day of
reemployment;

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(B)
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No agreement was entered into between
the State or a county and the retirant prior to the retirement of the retirant,
for the return to work by the retirant after retirement; and

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(C)
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The department of education or charter
school shall contribute to the pension accumulation fund the required
percentage of the rehired retirant's compensation to amortize the system's
unfunded actuarial accrued liability[
.
]
; or

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(6)
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As
a police officer and enrolled in the deferred retirement option program.
"

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SECTION
3
.
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Section 88-98, Hawaii Revised Statutes, is
amended to read as follows:

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"
�88-98
�
Return to service
of a retirant.
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(a)
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Any retirant
, except a
police officer retirant enrolled in the deferred retirement option program,

who returns to employment requiring active membership in the system shall be
reenrolled as an active member of the system in the same class from which the
retirant originally retired and the retirant's retirement allowance shall be
suspended.

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(1)
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If
the retirant returns to service before July 1, 1998, and again retires,
the retirant's retirement allowance shall consist of:

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(A)
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For
members with fewer than three years of credited service during the member's
period of reemployment, the allowance to which the member was entitled under
the retirement allowance option selected when the member previously retired and
which was suspended; plus, for the period of service during the member's
reemployment, the allowance to which the member is entitled for that service
based on the retirement allowance option initially selected and computed for
the member's age, average final compensation, and other factors in accordance
with the benefit formula under section 88-74 in existence at the time of the
member's latest retirement; or

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(B)
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For
members with three or more years of credited service during the member's period
of reemployment, the allowance computed as if the member were retiring for the
first time; provided that in no event shall the allowance be less than the
amount determined in accordance with subparagraph (A); and

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(2)
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If
the retirant returns to service after June 30, 1998, and again
retires, the retirant's retirement allowance shall be computed in accordance
with paragraph (1)(A), regardless of the number of years of service in the
reemployment period.

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(b)
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Any retirant who received the special retirement incentive benefit under
Act 253, Session Laws of Hawaii 2000, as amended by Act 131, Session Laws of
Hawaii 2002, and is reemployed by the State or a county in any capacity shall:

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(1)
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Have
the retirant's retirement allowance suspended;

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(2)
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Forfeit
the special retirement incentive benefit and any related benefit provided by
this chapter; and

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(3)
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Be
subject to the age and service requirements under section 88-73 when the member
again retires.

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(c)
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If a retirant's maximum retirement allowance
upon the retirant's initial retirement was subject to the limits on maximum
retirement allowance under section 88-74:

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(1)
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The limit shall apply to the computation of
the retirant's maximum retirement allowance for the retirant's period of
service during the retirant's reemployment, so that the sum of:

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(A)
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The per cent by which the retirant's
average final compensation for the retirant's years of service prior to the
retirant's initial retirement is multiplied to determine the retirant's maximum
retirement allowance upon the retirant's initial retirement; and

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(B)
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The per cent by which the retirant's
average final compensation for any period of reemployment after the retirant's
initial retirement is multiplied to determine the retirant's maximum retirement
allowance for the period of reemployment,

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shall
not exceed the limit, under section 88-74, on the per cent by which the
retirant's average final compensation may be multiplied for the purpose of
determining the retirant's maximum retirement allowance.
�
For example, if a retirant's maximum
retirement allowance upon the retirant's initial retirement was limited by
section 88-74 to eighty per cent of the retirant's average final compensation,
and the retirant retired with a maximum allowance equal to seventy per cent of
the retirant's average final compensation, the retirant's maximum allowance for
the retirant's period of reemployment may not exceed ten per cent of the
retirant's average final compensation for the retirant's period of
reemployment; and

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(2)
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If the retirant's maximum retirement allowance
upon the retirant's initial retirement was equal to or greater than the
applicable limit under section 88-74, the retirant shall not earn service
credit or earn any additional retirement allowance during the retirant's period
of reemployment, and the reemployed retirant shall not make any contributions
under section 88-45.

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(d)
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If a retirant's designation of beneficiary
was irrevocable upon the retirant's initial retirement, the retirant may not
change the retirant's designated beneficiary when the retirant returns to
service or when the former retirant again retires.

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(e)
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A retirant who returns to service shall not
be considered to be "in service", for the purposes of section 88‑75,
88-79, 88-84, or 88-85, or any other provision of this chapter providing for
benefits arising out of the disability or death of a member.
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A retirant who returns to service and dies
during the period of reemployment shall be considered to have retired again
effective as of the first day of the month following the month in which the
death occurs, except for death during the month of December when the effective
date of retirement may be the last day of the month.

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(f)
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There is established a deferred retirement option program for police
officers.
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A police officer who has
reached the service requirements for normal retirement shall be eligible to
enter the deferred retirement option program.
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Once enrolled in the deferred retirement option program, the enrollee's
service and benefit levels shall be locked as of the effective date of
enrollment.
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Pension payments for
deferred retirement option program enrollees shall be deposited to a deferred
retirement option program account each month with investment earnings or losses
at a rate equal to the pension plan's actual investment return, net of
investment expenses, and shall be paid upon termination from the program in
accordance with rules adopted by the board.
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Police officers enrolled in the deferred retirement option program shall
enroll within twelve months of eligibility for normal retirement.
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Enrollees may participate for a maximum of
one hundred twenty months; provided that their tenure shall not exceed
thirty-five total years.
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Enrollment in
the deferred retirement option program shall cease if an enrollee is unable to
continue as an active police officer for longer than twenty working days
excluding vacation days.
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Deferred
retirement option program enrollees shall not pay into the retirement
system.
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Deferred retirement option
program enrollees shall accrue sick and vacation leave credits.
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Vacation leave credits shall be paid into the
enrollee's deferred retirement option program account upon termination from the
program.
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Sick leave credits shall not be
paid upon termination and shall not count toward any retirement payments.
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Deferred retirement option participants shall
receive healthcare benefits as retirees.
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Upon participation in the deferred retirement option program the member shall
be deemed a retirant.
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Deferred
retirement option program participants shall not receive a disability benefit
from the pension plan.
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No additional
service credit shall accrue to the deferred retirement option program
participant.
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Deferred retirement option
program enrollees shall not be eligible for participation in any deferred
compensation plan offered by the State or county.

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[
(f)
]
(g)
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The board shall adopt any rules as may be
required to administer this section.
"

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SECTION 4.
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Statutory material to be repealed is bracketed and stricken.
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New statutory material is underscored.

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SECTION 5.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

By Request

Report Title:

Maui
County Council Package; Police; Deferred Retirement

Description:

Establishes
a deferred retirement option program for police officers.

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