A proposal introduced in the Hawaii Legislature Tuesday that would prevent so-called “spiking” of public pensions faced little resistance, according to published reports.
Proposed by the Hawaii Employees Retirement System administrator, the legislation would cap how much overtime can count toward pensions, according to Honolulu Civil Beat.
It would also make the state and counties responsible for costs linked to employees who spike their retirement benefits.
The amount of benefits state employees receive upon retirement is based in part on an average of the employee’s highest three years of pay, which covers all compensation including overtime and bonuses.
Between 2008 and 2010, pension spiking has added an estimated $39.6 million to the ERS’ unfunded liability, according to the report.
An estimated 674 employees have spiked their pensions over the same time period, according to an analysis by the system’s actuary.
The reforms are expected to be included in a bill that will be part of the Abercrombie administration’s package of bills.
