(a) Based on regular interest and such mortality and other tables as are adopted by the board of trustees, the actuary engaged by the board, on the basis of successive annual actuarial valuations, shall determine the employer’s normal cost and accrued liability contributions for each fiscal year beginning July 1 separately for the following two groups of employees:

Terms Used In Hawaii Revised Statutes 88-122

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • compensation: as used in this part means:
    (A) Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed;
    (B) Overtime, differentials, and supplementary payments;
    (C) Bonuses and lump sum salary supplements;
    (D) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; and
    (E) Retroactive payments of those purposes and nature authorized in subparagraphs (A) through (D), and certified as compensation pursuant to section 88-64;
(2) Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one-twelfth of compensation for the twelve months before the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned:
(A) During the period agreed-upon by the employer and employee, but in any event over a period of no less than twelvemonths; or
(B) In the absence of an agreement between the employer and the employee, over the twelvemonths before the date on which the bonus or lump sum salary supplement is payable; and
(3) Retroactive payments shall be deemed earned when it would have been earned, as determined by the system pursuant to section 88-64. See Hawaii Revised Statutes 88-21.5
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
    • (1) Police officers, firefighters, and corrections officers; and
    (2) All other employees.
    (b) The actuarial valuations shall be based on the contribution rates approved by the legislature, and the tables, assumptions, and factors adopted by the board for actuarial valuations of the system; provided that the investment yield rate assumption for the year ending June 30, 2011, shall be seven and three-quarters per cent.
    (c) With respect to each of the two groups of employees in subsection (a), the normal cost for each year after June 30, 1994, shall be the percentage of the aggregate annual compensation of employees as of March 31 of the valuation year as determined by the actuary using the entry age normal cost funding method. On each June 30 the board shall determine the allocation of the assets of the pension accumulation fund between the two groups of employees in subsection (a); provided that the assets of the pension accumulation fund as of June 30, 1976, shall be allocated between the two groups in the same proportion as the aggregate annual compensation of each group as of March 31, 1976.
    (d) Commencing with fiscal year 1994-1995 and each subsequent fiscal year, the actuary shall determine the total unfunded accrued liability using the entry age normal cost funding method separately for each of the two groups of employees in subsection (a). The accrued liability contribution for each of the two groups of employees shall be the annual payment required to liquidate the unfunded accrued liability over a period of twenty-nine years beginning July 1, 2000. Any increase or decrease in the total unfunded accrued liability resulting from legislative changes in the benefit provisions of the employees’ retirement system shall be liquidated over a period of time to be determined by the actuary.
    (e) Commencing with fiscal year 2005-2006 and each subsequent fiscal year until fiscal year 2007-2008, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on fifteen and three-fourths per cent of the member’s compensation for police officers, firefighters, and corrections officers and thirteen and three-fourths per cent of the member’s compensation for all other employees. Commencing with fiscal year 2008-2009 and each subsequent fiscal year until fiscal year 2011-2012, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on nineteen and seven-tenths per cent of the member’s compensation for police officers, firefighters, and corrections officers and fifteen per cent of the member’s compensation for all other employees. In fiscal year 2012-2013, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on twenty-two per cent of the member’s compensation for police officers, firefighters, and corrections officers and fifteen and one-half per cent of the member’s compensation for all other employees. In fiscal year 2013-2014, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on twenty-three per cent of the member’s compensation for police officers, firefighters, and corrections officers and sixteen per cent of the member’s compensation for all other employees. In fiscal year 2014-2015, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on twenty-four per cent of the member’s compensation for police officers, firefighters, and corrections officers and sixteen and one-half per cent of the member’s compensation for all other employees. Commencing with fiscal year 2015-2016 until fiscal year 2016-2017, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on twenty-five per cent of the member’s compensation for police officers, firefighters, and corrections officers and seventeen per cent of the member’s compensation for all other employees. In fiscal year 2017-2018, the employer contributions for normal cost and accrued liability for each of the two groups of employees in subsection (a) shall be based on twenty-eight per cent of the member’s compensation for police officers, firefighters, and corrections officers and eighteen per cent of the member’s compensation for all other employees. In fiscal year 2018-2019, the employer contributions for normal cost and accrued liability for each of the two groups in subsection (a) shall be based on thirty-one per cent of the member’s compensation for police officers, firefighters, and corrections officers and nineteen per cent of the member’s compensation for all other employees. In fiscal year 2019-2020, the employer contributions for normal cost and accrued liability for each of the two groups in subsection (a) shall be based on thirty-six per cent of the member’s compensation for police officers, firefighters, and corrections officers and twenty-two per cent of the member’s compensation for all other employees. Commencing with fiscal year 2020-2021 and each subsequent fiscal year, the employer contributions for normal cost and accrued liability for each of the two groups in subsection (a) shall be based on forty-one per cent of the member’s compensation for police officers, firefighters, and corrections officers and twenty-four per cent of the member’s compensation for all other employees. The contribution rates shall amortize the total unfunded accrued liability of the entire plan over a period not to exceed thirty years.

    The contribution rates shall be subject to adjustment:

    (1) If the actual period required to amortize the unfunded accrued liability exceeds thirty years;
    (2) If there is no unfunded accrued liability; or
    (3) Based on the actuarial investigation conducted in accordance with section 88-105.