Commentaries

January 2009

True Lies:

Hawaii's Government Employees' Retirement System

By George L. Berish

As a Fellow of the Society of Actuaries, I know almost everything taxpayers are told about the Hawaii Government Employees' Retirement System is false.

One lie is that employee benefits depend on, or are affected by, the $10 billion of assets earmarked by the state for their payment. In truth, the benefits are legally guaranteed by the taxpayers' full faith and credit. Losing the entire $10 billion would not cost any employee or retiree a single penny of benefits already earned, or a single penny of future retiree cost of living allowances (COLAs). The Unions even claim current employees would retain the right to earn more benefits under the current formula for life, and the Attorney General's silence blesses that claim. Instead, taxpayers would make up every lost dollar, continue annual contributions for new benefits as they are earned, and even make up any amount by which future earnings fall short of 8 percent thereafter. (more)

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