The Senate Committee on Judiciary and Labor
Tuesday, February 7, 2017
9:00 AM, Conference Room 016
RE: SB 1047, Relating to the Employeesʻ Retirement System
Attention: Chair Gilbert Keith-Agaran, Vice Chair Karl Rhoads and
Members of the Committee
The University of Hawaii Professional Assembly (UHPA) urges the committee to support passage of SB 1047, 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 SB 1047.