Hawaii Retirement System Looks to Curb Pension Scams
10/21/2011
Employees' Retirement System
Hawaii's public employees may no longer be able to boost their retirement benefits by "spiking" their pay through things like overtime.
The Hawaii Employees' Retirement System is looking at drafting legislation to deter the scam known as pension spiking.
"This would target anyone who might be trying to game the system or trying to boost their pension in their final years of service," ERS Administrator Wes Machida told Civil Beat Thursday. "We're looking into what can be used to prevent that from happening, and so that these types of situations don't continue. It's something the board is concerned about."
Pension benefits are calculated by averaging an employee's highest three or five years of compensation, depending on their hire date. Compensation, as currently defined by statute, includes base pay, overtime, differentials and supplementary payments, bonuses and lump sum salary supplements.
Unions Opposed Similar Bill
During the 2011 legislative session, a bill that aimed to redefine compensation for future public employees to include only base pay ultimately stalled. It could be revived next year.
That bill received considerable pushback from labor union leaders, including the State of Hawaii Police Officers union, which argued that the change would deter recruitment of new hires.
