The House Committee on Labor & Public Employment
Thursday, February 9, 2017
8:30 am, Room 309
RE: HB 1182, Relating to Employees’ Retirement System
Attention: Chair Aaron Ling Johanson, Vice Chair Daniel Holt and
Members of the Committee
The University of Hawaii Professional Assembly (UHPA) urges the committee to support passage of HB 1182, requiring the Employeeesʻ 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.
The recent decision by the ERS Board to reduce the assumed rate of return from 7.5% to 7.0% all at once immediately increased the unfunded liability by $1.7 Billion, and has forced the legislature to review the required contributions. 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 passage of HB 1182.