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COUNTY OF HAWAII
<br /> Notes to the Basic Financial Statements
<br /> June 30,2005
<br /> All of the County's full-time employees are eligible to participate in the System. The System
<br /> consists of a contributory retirement plan and a noncontributory retirement plan. Eligible
<br /> employees,in service and a member of the existing contributory plan on June 30, 1984,were
<br /> given an option to remain in the existing plan or join the noncontributory plan,effective
<br /> January 1, 1985. All new eligible employees hired after June 30, 1984 generally become
<br /> members of the noncontributory plan. Both plans provide death and disability benefits and a
<br /> cost of living adjustment. In the contributory plan,employees generally may elect normal
<br /> retirement at age 55 with 5 or 10 years of credited service or elect early retirement at any age
<br /> with 25 years of credited service. Such employees are generally entitled to retirement
<br /> benefits,payable monthly for life,of 2%or 2'/z%of their average final salary,as defined,for
<br /> each year of credited service with certain limitations. Benefits fully vest on reaching five
<br /> years of service;retirement benefits are reduced for early retirement. In the noncontributory
<br /> plan,employees may elect normal retirement at age 62 with 10 years of credited service or at
<br /> age 55 with 30 years of credited service,or elect early retirement at age 55 with 20 years of
<br /> credited service. Such employees are entitled to retirement benefits,payable monthly for life,
<br /> of 1.25%of their average final salary,as defined,for each year of credited service. Benefits
<br /> fully vest on reaching ten years of service;retirement benefits are reduced for early
<br /> retirement.
<br /> The System issues a Comprehensive,Annual Financial Report that may be obtained by writing
<br /> to the Employees' Retirement System of the State of Hawaii,201 Merchant Street, Suite
<br /> 1400,Honolulu,Hawaii 96813.
<br /> Funding policy All funding requirements are established by Chapter 88,HRS,and can be
<br /> amended by the state legislature. Covered contributory plan employees are required to
<br /> contribute 7.8%or 12.2%of their salary to the plan;the County is required to contribute the
<br /> remaining amounts necessary to pay contributory plan benefits when due. The County is also
<br /> required to contribute all amounts necessary to pay noncontributory benefits when due. The
<br /> County's contribution requirements are actuarially determined based on actuarial assumptions
<br /> established by Chapter 88,HRS. The County's contributions to the System for the fiscal
<br /> years ended June 30,2003,2004 and 2005 were$4,212,000, $7,394,683 and$10,487,763,
<br /> respectively,equal to the required contributions for each year.
<br /> Post-Retirement Benefits
<br /> In addition to providing the pension benefits described above,the County is required by state
<br /> statute to contribute to the Hawaii Employer-Union Health Benefits Trust Fund(the EUTF),
<br /> a statewide program which provides health and group life insurance for all retired and active
<br /> County employees,their dependents and their beneficiaries. The state and other counties also
<br /> participate in the fund. For employees hired prior to July 1, 1996 who retire with at least ten
<br /> years of credited service,the County is required to pay 100%of the premiums of the medical,
<br /> adult dental,prescription drug,vision,and group life insurance plans elected by the retiree.
<br /> For employees hired prior to July 1, 1996 who retire with less than ten years of credited
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