SB 134, RELATING TO THE UNIVERSITY OF HAWAIʻI

The Senate Committee on Judiciary and Labor
Monday, February 27, 2017
10:00 am, Room 016

Attention: Chair Gilbert Keith-Agaran, Vice Chair Karl Rhoads and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) opposes SB 134 relating to a statutory prohibition on smoking, tobacco use and the use of electronic smoking devices by any person on the premises of the University of Hawaiʻi.  The University already has the authority and the ability to prohibit smoking and the use of tobacco and electronic smoking devices as noted in Section 1 paragraph 3 of SB 134.

The University has worked with UHPA in the past and continues to work with UHPA to ensure a healthy working conditions for the faculty and subsequently the students.  It continues to be the right of UHPA to work with the University to ensure that any policy that impacts faculty work environment promotes “positive health practices.”

We appreciate the opportunity to continue retaining the determination of best practices in the workplace; in the workplace rather than in statute.

UHPA opposes the passage of SB 134.

Respectfully submitted,

Kristeen Hanselman
Executive Director

SB 919, SD1, RELATING TO PUBLIC EMPLOYMENT COST ITEMS

The Senate Committee on Ways and Means
Tuesday, February 21, 2017
10:05 am, Room 211

Attention: Chair Jill Tokuda, Vice Chair Donovan Dela Cruz and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) urge the Committee to support passage of SB 919, SD1 which is a measure to appropriate funds for fiscal biennium 2017-2019 for salary costs for public employees in collective bargaining unit (7) and for certain employees excluded from collective bargaining.

UHPA urges the committee to support SB 919, SD1.

Respectfully Submitted,

Kristeen Hanselman
Executive Director

SB 981, SD1, RELATING TO THE HAWAII LABOR RELATIONS BOARD

The Committee on Ways and Means
Wednesday, February 22, 2017
9:30 am, Room 211

Attention: Chair Jill Tokuda, Vice Chair Donovan Dela Cruz and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) urge the Committee to support passage of SB 981, SD 1 that amends Chapter 396, Hawaii Revised Statutes, providing the HLRB the same authority already allowed under Chapter 89 regarding service of pleadings.  UHPA supports efforts to streamline processes and procedures for the HLRB that will result in administrative efficiencies.

UHPA supports passage of SB 981, SD1.

Respectfully submitted,

Kristeen Hanselman
Executive Director

HB 810, HD1 Relating to Collective Bargaining

The House Committee on Finance
Thursday, February 23, 2017
1:00 pm, Room 308

Attention:    Chair Sylvia Luke, Vice Chair Ty Cullen and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) urges the committee to support passage of HB 810, HD1.

Chapter 89-9, Hawaii Revised Statutes, outlines the scope of negotiations and consultation and Chapter 89-11, Hawaii Revised Statutes, outlines the resolution of disputes and impasse procedures between the exclusive representative and the employer.  The amendments to these respective sections outlined in HB 810 HD1 will provide the appropriate pathway for resolving disputes between the exclusive representative and the employer regarding contributions to the Hawaii Employer-Union Health Benefits Trust Fund (EUTF).   

UHPA urges the committee to support HB 810, HD1.

Respectfully Submitted,

Kristeen Hanselman
Executive Director

 

HB 424, HD1, Relating to The University of Hawaii

The House Committee on Finance
Wednesday, February 22, 2017
2:00 pm, Room 308

Attention: Chair Sylvia Luke, Vice Chair Ty Cullen and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) urges the committee to support HB 424, HD1 that reinstates the authority and responsibility for all procurement contracts under chapter 103D, Hawaii revised Statutes, to the University President.

The ability of the University to expedite construction needs for repair and maintenance as well as new construction is essential to enhancing instruction and research. The physical conditions that students and employees experience influence recruitment and retention. For too long the need to remove impediments in procurement has languished resulting in repairs and replacement of buildings being delayed. The University President should have both the authority and the accountability for procurement.

UHPA urges the committee to support HB 424, HD1.                                                                     

Respectfully Submitted,

Kristeen Hanselman
Executive Director

HB 232, HD1, RELATING TO COLLECTIVE BARGAINING

The House Committee on Finance
Wednesday, February 22, 2017
3:00 pm, Room 308

Attention: Chair Sylvia Luke, Vice Chair Ty Cullen and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) urges the committee to support HB 232, HD1, which encourages the parties to a collective bargaining agreement to negotiate in a manner that effectuates the purpose of Chapter 89. Such purpose includes recognizing that public employees have a voice in determining their working conditions. This proposed measure advances the cooperative relations between employers and employees that establishes a healthy collective bargaining environment.

UHPA encourages the Committee to support HB 232, HD1.

Respectfully Submitted,

Kristeen Hanselman
Executive Director

 

HB 213, HD1 RELATING TO FAMILY LEAVE

The House Committee on Finance
Wednesday, February 22, 2017
3:00 pm, Room 308

Attention: Chair Sylvia Luke, Vice Chair Ty Cullen and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) urges the committee to support passage of HB 213, HD1 that amends the Hawaii Family Leave Law, Chapter 398 of the Hawai‘i Revised Statutes to extend protected job status to care for a sibling or upon the death of a child, spouse, reciprocal beneficiary, sibling or parent.

UHPA has a very diverse bargaining unit with faculty in very different stages of their careers.  Leaves of absences, such as family leave, impact a broad based section of our membership, and is no longer a focus of the younger segment of our members who are having children.  Many faculty are dealing with caring for their spouses or parents.  Passage of this legislation will provide some much needed security for UHPA members that does not exist today.     

Faculty members are highly sought after in the highly competitive arena of higher education.  Passage of this measure will provide the necessary stability and security for our membership.

UHPA supports the passage of HB 213, HD1.

Respectfully submitted,

Kristeen Hanselman
Executive Director

HB 1182, HD1, Relating to Employees’ Retirement System

The House Committee on Finance
Wednesday, February 22, 2017
3:00 pm, Room 308

Attention: Chair Sylvia Luke, Vice Chair Ty Cullen and Members of the Committee

The University of Hawaii Professional Assembly (UHPA) supports the intent of HB 1182, HD1, requiring the Employeesʻ Retirement System (ERS) actuary to perform annual stress tests of the system and the ERS Board to submit annual reports of the tests to the legislature.

Due to market indicators nationally, the ERS Board had previously taken a responsible approach by slowly lowering the assumed rate of return 50 basis points over a five year period. However, the recent decision by the ERS Board to reduce the assumed rate of return 50 basis points all at once has caused a great deal of anxiety for beneficiaries and the public as a whole.  That one action by the ERS Board immediately increased the unfunded liability by $1.7 Billion, and has statutorily forced the legislature to review the required employer contributions.  When actions by the ERS Board have statewide fiscal implications, additional oversight may be required to ensure the beneficiaries have confidence their interests are being addressed.

Requiring the ERS actuary to perform an annual stress test and report its findings to the legislature will provide a level of transparency that is currently not in place and ensure that the decisions of the ERS Board are not made in a vacuum since the decision to reduce the assumed rate has statewide implications.  

UHPA supports the intent of HB 1182, HD1.

Respectfully submitted,

Kristeen Hanselman
Executive Director

How you will be affected by a lump sum payment

Highlights

  • UHPA recently received the written salary proposal from the Governor.
  • The offer provides a 1% one-time lump sum cash bonus of a faculty members’ base salary.
  • The offer will impact faculty members differently based on your employment date.

If you were hired Before July 1, 2012

Faculty Members hired before July 1, 2012 will have ERS deductions taken from the lump sum cash bonus. The lump sum cash bonus will count toward the “high three” years of salary for purposes of calculating retirement benefits.

If you were hired from July 1, 2012 to the present

Faculty Members hired July 1, 2012 to the present shall have no ERS deduction taken from the lump sum cash bonus. The lump sum cash bonus will not count toward the “high five” years of salary for purposes of calculating retirement benefits.

Other Faculty Compensation

There are no increases in minimum annual salaries; lecturer fee schedule; non-credit fee schedule, and overload rates per credit hour.

UHPA’s view on the Governor’s 1% lump

This is an unacceptable proposal from the Governor and continues to devalue the work of faculty members. UHPA’s bargaining team has been firm in its opposition to this paltry sum and has expressed this directly to the Governor’s representative.

FAQs about the Hawaii ERS Unfunded Liability

In recent weeks, we have seen a great deal of information regarding the dramatic increase in the unfunded liability of the Hawaii ERS (Employeesʻ Retirement System).  We understand the concerns and wanted to provide some perspective on this situation to ensure that you, as beneficiaries, understand what happened and how it is being handled.  Please look through the Q&A below and let me know if you have any questions or concerns.

 

  • What is the Hawaii ERS unfunded liability?

    • The ERS unfunded liability is the amount of money, at any given point in time, in which future retirement payments exceed the amount of funds currently available to pay for them.
  • Why did the Hawaii ERS unfunded liability balloon this year by roughly $3 Billion?

    • According to the ERS actuarial valuation report, there were two main factors contributing to the dramatic increase in the unfunded liability:
      • The ERS Board voted to decrease the investment return assumption from 7.50% to 7.00%, which subsequently increased the unfunded liability by $1.7 billion
      • Increasing life expectancy, because people are living longer in retirement, resulted in an increase of $1.2 billion
    • These changes caused the ERS funding ratio to drop from 61.2% funded to 54.7% funded.
  • What are the implications of the increase in the Hawaii ERS unfunded liability?

    • The roughly $3 Billion increase in the unfunded liability increased the funding period from 27 years to 66 years to full funding.  Statutorily, the employer contribution rates must be reviewed for adjustment once the accrued liability exceeds 30 years.  There is legislation attempting to address new contribution rates during the 2017 legislative session.
  • Did the Hawaii ERS Board know the ramifications of decreasing the investment return assumption from 7.50% to 7.00%?

    • Yes.  Wesley Machida, the State Budget & Finance Director, is an Ex Officio voting ERS Board Member.  He confirmed that the ERS Board was apprised of the impact that decreasing the investment return assumption would have on the unfunded liability, but chose to proceed anyway.  Due to a strong trend of lowering return expectations across the industry, the ERS Board has been slowly decreasing the investment return assumption, beginning at 8.00% and slowly moving down to 7.50% over a five year period.  What had previously taken five years to accomplish, was done all at once by the ERS Board, which had negative implications on the unfunded liability.
  • Did the Hawaii ERS Board have to take this approach and decrease the investment return assumption from 7.50% to 7.00%?

    • No, it was not necessary to decrease the investment return assumption in such a dramatic fashion.  The ERS Board was making progress in decreasing the investment return assumption gradually, ensuring that the accrued liability did not exceed thirty years.  That one action changed the entire ERS landscape and is forcing the legislature to make decisions on how to find the funding.
    • In December 2016, CalPERS, the California Public Employeesʻ Retirement System, took a similar action by decreasing their investment return assumption from 7.50% to 7.00%, but decided to spread that decrease over a three year time period.  This is an approach the ERS Board could have taken.
  • What are the ramifications of the action taken by the Hawaii ERS Board?

    • $385 Million is required to meet the funding obligations for the ERS due in large part to the actions by the ERS Board.  Those actions are forcing the legislature to look at yet another area in need of funding, taking away from competing interests, such as pay raises for public employees.
  • Why is the Hawaii ERS in this fiscal dilemma in the first place?

    • Going back to the 1960ʻs, the Legislature raided roughly $1.6 Billion to help make ends meet in other areas.  If those raids were not made, the ERS would likely be above 90% funded.
  • Should you be concerned about your retirement payments?

    • No, not at this time.  It is foolish to believe that the everyone eligible for retirement benefits would seek payment all at once.  As long as the required payments towards your retirement benefits are made, there should be no issues in meeting the retirement obligations.  Think of the ERS unfunded liability as you would your mortgage payments.  As long as you make the necessary monthly payments, there are no issues and you continue to live in your home.