2007-07-23_George_Kahoohanohano_et_al_v._State_of_Hawaii_et_al_-_Opinion_of_the_court_by_Justice_Acoba

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Kaho'ohanohano v. State Page 24 of 46 XXXIV. A. As to Trustees' first argument, the proceedings of the 1950 Constitutional Convention demonstrate that article XVI, section 2 was introduced to ensure that the State and local governments would provide a sound retirement system for their employees, largely because of the Territory's past lapses in funding such benefits. Delegate Trask who initiated discussion of the proposed provision stated, "I believe that the government employees are entitled to a constitutional protection of a system that has gone a long way in contributing to the welfare of our community." Proceedings of the Constitutional Convention of Hawaii of 1950, Vol. 2 at 493 (emphasis added). Thereafter, Delegate Ohrt, the primary proponent of article XVI, section 2 (also referred to as the non-impairment clause or the pension provision), echoed these introductory comments and stated further: I was interested in Proposal 129 which I think is the type of proposal that this Convention should adopt. The retirement system really gives protection to some 16,000 employees and fixes the benefits through a trust fund.That is,the retirement system has been set up as a trust fund,and as I understand it,there is a statutory contractual relationship at the present time,and I think the employees would like to see it as a constitutional contractual relationship. Id. (emphases added). However, the adoption of the non-impairment clause also faced some initial opposition. The Standing Committee on Taxation and Finance advised against the provision, believing that it "would interfere with the free action of the legislature who can take necessary action as the times may warrant, after they have had an opportunity to complete a careful review and analysis of the system and of the financial condition of the State." Standing Committee Report No. 44, in Proceedings of the Constitutional Convention of Hawaii of 1950, Vol. 1 at 180. During the debates that followed, certain delegates echoed the Committee's concern about binding future legislatures to adequate funding of the pension system. Delegate Tavares stated that, "by making it a contractual relationship, we would be sewing up every future legislature to guarantee to put up enough money for this system forever and ever . . . . If we put this through we are saying until this and unless this Constitution is amended, we can't do anything else but keep it up." Proceedings of the Constitutional Convention of Hawaii of 1950, Vol. 2, at 494. Other delegates, however, expressed what ultimately proved to be the prevailing view, i.e., that the constitutional provision was needed in large part to ensure that the Hawaii legislature continued to meet its funding obligation. Delegate Sakakihara explained that the provision was intended to protect government employees by strengthening the government's obligation to maintain and fund the retirement system: I recall some 18 years ago when the legislature of the Territory of Hawaii absolutely defaulted on their share of the contribution towards this obligation. As we all know,the retirement system is a sacred trust by the government of funds entrusted by the employees of this Territory and the counties.Unwise investments were then made by the then trustees of the retirement systems. I remember very, very much,because I was a member of the finance committee of that session of the legislature. I say to you,that the employees of the county, City and County and the Territory today are by law required to become members of the retirement system as long as they are employed by the government. They have no choice. They have no alternative but to become a member of the retirement system. I feel very strongly that there should be a contractual relationship,there should be between the government,if the government desires to maintain this system in good faith with the employees of the government. As presented here by Delegate Ohrt,there are some 16,000 employees of the county, City and County and the Territory. What protection do these employees have?What assurance do they have after having been employed in the service of the government that this fund will be secure?What assurance do they have that the government will continue to put up its share toward this retirement fund? I recall the day when the actuary,Mr.Buck,was invited by the legislature and appeared before the legislature in joint session and actually advocated that that security should be given to the employees of this government who are members of the retirementsystem. This fund has grown to the extent of$45,000,000 and I feel very strongly,ladies and gentlemen,that this amendment should be adopted and that the government should in good faith keep their obligation with the employees of the territory. I am therefore very strongly in favor of incorporating this amendment in the Constitution. Id. at 495 (emphases added). In response, Delegate Ashford reminded the Convention that the system's actuary had "recommended further deposits http://www.state.hi.us/jud/opinions/sct/2007/26178.htm 8/12/2008