HI HB805

Amends Employees' Retirement System (ERS) laws to comply with Internal Revenue Code section 401(a) requirements and vesting rules to maintain tax-qualified retirement plan status.

Loss of tax-exempt status would cause harmful federal tax consequences, including subjecting employee contributions to immediate federal income tax and taxing members on their total accrued benefits at vesting rather than at retirement.

ERS received a favorable determination letter from the Internal Revenue Service on March 21, 2012, conditioned on adoption of proposed statutory amendments reviewed and approved by the IRS.

Implements technical, nonsubstantive amendments for clarity and consistency to complete the IRS determination letter process.

Referred to the Committee on Ways and Means for further consideration.