2007 CAFR Part 4 - Laserfiche WebLink

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COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 The System issues a Comprehensive Annual Financial Report that may be obtained by writing to the Employees' Retirement System of the State ofHawai`i,201 Merchant Street, Suite 1400,Honolulu,Hawaii 96813. Funding policy All funding requirements are established by Chapter 88,HRS,and can be amended by the state legislature. Covered contributory plan employees are required to contribute 7.8%or 12.2%of their salary to the plan;the County is required to contribute the remaining amounts necessary to pay contributory plan benefits when due. The County is also required to contribute all amounts necessary to pay noncontributory benefits when due. The County's contribution requirements are actuarially determined based on actuarial assumptions established by Chapter 88,HRS. Effective July 1,2005,employer contribution rates are a fixed percentage of compensation,including the normal cost plus amounts required to pay for the unfunded actuarial accrued liability. The employer contribution rates in effect at June 30, 2007 were 15.75%for Police and Fire employees and 13.75%for all other employees. The County's contributions to the System for the fiscal years ended June 30,2005,2006 and 2007 were$10,487,763,$15,452,562 and$16,337,218,respectively,equal to the required contributions for each year. Post-Retirement Benefits In addition to providing the pension benefits described above,the County is required by state statute to contribute to the Hawaii Employer-Union Health Benefits Trust Fund(the EUTF), a statewide program which provides health and group life insurance for all retired and active County employees,their dependents and their beneficiaries. The state and other counties also participate in the fund. For employees hired prior to July 1, 1996 who retire with at least ten years of credited service,the County is required to pay 100%of the premiums of the medical, adult dental,prescription drug,vision,and group life insurance plans elected by the retiree. For employees hired prior to July 1, 1996 who retire with less than ten years of credited service,the County is required to pay half of the monthly premium cost ofthe above plans. For employees hired July 1, 1996 or after,the amount of the premium cost the County is required to pay varies depending on the employee's years of service at the time of retirement. Currently,the County has 1,131 former employees who have retired with at least ten years of credited service and are receiving the full benefit. Two additional employees have retired with less than ten years of service and have half of their medical premiums paid by the County. For each retiree and retiree's spouse eligible for Medicare,the County also pays $93.50 per month as reimbursement of their Medicare premiums. The County's contribution is recorded as an expenditure when paid. The amount of the contribution is limited by state statute to the actual cost of benefit coverage. During the fiscal year ended June 30,2007,the County's contribution to the EUTF for retired employees totaled$6.8 million. -75 -