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CORRECTION: 6/30/11 9:25 a.m.The premise of this article was incorrect and was based on my misreading of the bill. For that, I apologize. The language of the bill actually states that new legislators, judges and elected officials will earn pensions at the rate of 3 percent per year after July 1, 2012, down from 3.5 percent currently. Read the bill.
Why is it that Hawaii lawmakers want new state and county employees to earn pensions at a lower rate but didn’t require new lawmakers to take the same medicine?
I’m not sure anything could be more complicated than the Hawaii Public Employees’ Retirement System.
And lawmakers made it even more complicated in the 2011 legislative session, when they added a new tier of benefits for employees who start work on or after July 1, 2012. Instead of earning their pensions at a rate of years of service times 2 percent, they’ll be earning at years of service times 1.75 percent.
Today’s workers can earn 50 percent of their salary after 25 years. It’ll take the new employees 29 years to do the same thing.
Lawmakers can earn 50 percent of their salary in barely more than 14 years.
They didn’t change that.
They’ll still earn pensions at a much quicker rate, 3.5 percent times years of service. You see, lawmakers, judges and elected officials get a better deal than everybody else.
Here’s what the law says:
(B) Irrespective of age, for each year of credited service as a legislative officer, three and one-half per cent of the member’s average final compensation as computed under section 88-81(e)(2), in addition to an annuity that is the actuarial equivalent of the member’s accumulated contributions allocable to the period of service
That’s made even sweeter because employees are eligible to earn up to 75 percent of their pay. It would take a lawmaker 21 and a half years to do that. It would take one of those new employees 42.85 years to do the same thing.
By the way, lawmakers today earn $46,272 a year. (Oh, I forgot to say that it’s a part-time job. They work about four months a year, or at least that’s how long the Legislature is in session.)
You’d think the lawmakers would set an example by doing what they’re asking others to do.
What kind of message does that send? A bad one, if you ask me.
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