Benefits March 10, 2006

Hawaii ERS Puts out New Plan Scheme

March 10, 2006 (PLANSPONSOR.com) - The good news is that state and county workers in Hawaii can join a new pension program that could add hundreds of dollars to their monthly benefits. The bad news is that they will have to contribute an additional 6% from each paycheck.
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The Hawaii Employees’ Retirement System (ERS) is waiting to hear from about 45,000 workers about whether they want to join the program along with the 10,400 employees who have already opted to do so, according to a Honolulu Advertiser report. Most state and county employees do not now contribute to their pensions.

If they do not indicate a decision, they will simply stay where they are, Wesley Machida, ERS assistant administrator, told the newspaper.

The new plan, mandated by the state legislature, will take its place alongside two existing programs. For participants of the ERS’ largest plan, the program under which employees do not contribute anything, the plan will produce larger pension benefits because a formula used to compute payments has been changed to take into account worker contributions.

The latest offering is the first new plan from the Hawaii Employees’ Retirement System since 1984. It will go into effect July 1.

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