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County of Hawaii
<br />Department of Water Supply
<br />(A component unit of the County of Hawaii, State of Hawaii)
<br />NOTES TO FINANCIAL STATEMENTS
<br />June 30, 2020 and 2019
<br />NOTE G - EMPLOYEE BENEFITS (Continued)
<br />Contributions - Contributions are governed by HRS Chapter 88 and may be amended
<br />through legislation. The employer rate is set by statute based on the recommendations of the
<br />ERS actuary resulting from an experience study conducted every five years. Since
<br />July 1, 2005, the employer contribution rate is a fixed percentage of compensation, including
<br />the normal cost plus amounts required to pay for the unfunded actuarial accrued liabilities.
<br />The contribution rates for fiscal years 2020 and 2019 were 36.00% and 31.00%, respectively,
<br />for police officers and firefighters, and 22.00% and 19.00%, respectively, for all other
<br />employees. Contributions to the pension plan from the Department were $2,258,593 and
<br />$1,950,328 for the fiscal years ended June 30, 2020 and 2019, respectively.
<br />On May 18, 2017, the Governor signed into law Act 17 SLH 2017. Per Act 17, future employer
<br />contributions from the State and counties are expected to increase pursuant to a phased -in
<br />contribution rate increase over four years beginning July 1, 2017. The rate for police officers
<br />and firefighters increases to 31.00% on July 1, 2018; 36.00% on July 1, 2019; and 41.00% on
<br />July 1, 2020 and the rate for all other employees' increases to 19.00% on July 1, 2018; 22.00%
<br />on July 1, 2019; and 24.00% on July 1, 2020.
<br />The employer is required to make all contributions for noncontributory members. Contributory
<br />members hired prior to July 1, 2012 are required to contribute 7.8% of their salary, except for
<br />police officers and firefighters who are required to contribute 12.2% of their salary.
<br />Contributory members hired after June 30, 2012 are required to contribute 9.8% of their salary,
<br />except for police officers and firefighters who are required to contribute 14.2% of their salary.
<br />Hybrid members hired prior to July 1, 2012 are required to contribute 6.0% of their salary.
<br />Hybrid members hired after June 30, 2012 are required to contribute 8.0% of their salary.
<br />Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and
<br />Deferred Inflows of Resources Related to Pensions - At June 30, 2020 and 2019, the
<br />Department reported a liability of $32,029,248 and $33,522,053, respectively, for its
<br />proportionate share of the net pension liability. The net pension liability was measured as of
<br />June 30, 2019 and 2018, and the total pension liability used to calculate the net pension
<br />liability was determined by an actuarial valuation as of that date. The Department's proportion
<br />of the net pension liability was based on a projection of the Department's long-term share of
<br />contributions to the pension plan relative to projected contributions of all participants,
<br />actuarially determined. At June 30, 2019, the Department's proportion was 0.23%, a decrease
<br />of 0.02% from its proportion measured as of June 30, 2018. At June 30, 2018, the
<br />Department's proportion was 0.25%, which was an increase from its proportion measured as
<br />of June 30, 2017.
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