Trustees of the state Employees' Retirement System voted yesterday to submit legislation to the Lingle administration restoring the former method in which public workers' pensions are calculated. ERS wants
former pension method
By Dave Segal
dsegal@starbulletin.comThe board also approved an actuarial recommendation from Michael Carter of Gabriel, Roeder, Smith & Co. that state and county employers will need to increase their contributions to $235.7 million in the fiscal year ending June 30, 2004, and to $328.7 million in fiscal 2005 to help make up for shortfalls in the state's biggest pension fund. The increases are 25 percent and 39.5 percent, respectively, over the previous years.
Prior to this year, the formula for calculating an employee's pension used the average of his or her highest three or five earnings years. Those hired on or after Jan. 1, 1971, had their pension calculated based on their three highest earnings years. A year could be any consecutive 12-month period.
However, state lawmakers passed a law last year that limited the "high three" or "high five" to calendar years, or the last 36 or 60 months of employment. ERS had requested the switch to streamline operations. The legislation went into effect this year.
Other changes restrict retirement dates to the first day of each month or last day of the year, provide employees 150 days instead of 90 to file a retirement application, reduce pension payments to once a month, and allow families to keep the entire month's pension for the month a retiree dies. Those changes will stay in place.
While the new methodology wasn't expected to have much impact on public employees whose incomes are consistent year to year, it affected the pensions of employees whose income vary because of overtime, such as police officers.
In another order of business, the eight-member ERS board of trustees also voted to retain Jackie Ferguson-Miyamoto as chairwoman and Rick Humphreys as vice chairman.
Employees' Retirement System
