Posted on: Sunday, March 7, 2004
Relief in sight for state's public employee retirees
By Deborah Adamson
Advertiser Staff Writer
State and city retirees, who usually wait nearly two years after their retirement date to get their full monthly pension, will soon be getting some relief.
By the end of this year the Employees' Retirement System will be able to deliver pensioners their full due within six months of retirement, said Administrator David Shimabukuro.
Last year the State Auditor's office criticized the ERS for taking an average of 18 months to calculate full benefits. Retirees were shortchanged from $280 to more than $10,000 while the agency figured out exactly how much they were owed per month. What made the wait even more painful was that, when the state would finally make up the difference, it was paid back with no interest.
"Being aggrieved is the end of the world for you if you're living on a fixed income," said Russell Okata, executive director of the Hawaii Government Employees Association, a union that represents 9,000 retirees. "We continue to receive calls from retirees asking when their pensions will be finalized."
When public employees retire, they get more than 90 percent of their projected pension payments. The final calculation comes after the pension fund receives a full accounting of any unused vacation and sick days, plus other adjustments. The ERS covers more than 97,000 state and city workers, of which 31,500 are retirees and their beneficiaries.
A mid-level administrator who retired from the University of Hawai'i said it took about a year and a half to get his additional $300 a month. He said it took too long to find out how much he was entitled to and any calls to follow up were met with a "cavalier" attitude. The worker asked not to be identified because of his ongoing relationship with ERS.
A clerical worker for the state Education Department, who also declined to be identified, said it took her 18 months to get her full pension, and in the meantime her monthly checks were $200 short. But she cites her department's delays in getting paperwork to ERS for making the problem worse. She kept following up with her department to no avail, and finally had to ask the union to step in.
Pension officials said a newly passed law should help ensure that retirees get their full pension payment in a timely fashion.
Since calculating the exact pension is dependent on how fast government agencies provide employee information, the ERS backed a bill last year that would fine state and county departments $10 per month for each request for data if they don't respond within 30 to 90 days. Act 134 became law and went into effect Jan. 1.
The act doesn't give ERS a free pass either. The pension fund has to pay 4.5 percent interest on the remaining 10 percent of a retiree's pension payment if it's not finalized within six months after retirement. Historically, the ERS has never paid interest even if final calculations took more than a year.
As of last week, the ERS has switched to a new IBM system, speeding up data input by about 10 times. A full integration of the system will take place in a few years, according to pension fund officials.
The new, integrated system will have imaging — employee data is pulled up through the computer. At present, ERS employees retrieve data from microfilm. The new system ensures that the pension fund's staff won't have to input the same information five times, which they did for years with computers that weren't linked to each other.
Last September, the ERS settled a lawsuit with Colorado-based Quovadx Inc. over a botched $13 million contract to update the computer system.
Since the auditor's report last year, the ERS added six claims examiners to its staff for a total of 22. Examiners had been going through 900 cases a year, spending three to four hours per case, which includes other services besides finalization of payments. An expanded staff should cut down the caseload.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
