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ERS Files Temporary Restraining Order To Stop Early Retirement and Severance Payout

August 20, 2016

The following is an update regarding the State Employees' Retirement System lawsuit to halt implementation of Act 1 (SB 2077).
 
It is unfortunate and disappointing that the ERS has resorted to alarming the public with claims of harm to the state pension fund tax status when any issues that potentially exist in the bill could have been updated legislatively.
 
On Tuesday, Aug. 16, the ERS filed a Temporary Restraining Order in First Circuit Court. A hearing is set for Monday, Aug. 22. If granted, the TRO would temporarily stop any early retirements or severance payouts for eligible Maui Region hospital workers under Act 1.
 
The ERS lawsuit itself seeks an injunction that would freeze Act 1 until the parties receive information from the  Internal Revenue Service to determine whether or not the new law would affect the ERS's tax status.
 
Attorneys consulted by AFSCME on behalf of HGEA have determined that the claims regarding potential harm to the pension fund's tax status are highly speculative and wildly overstated. According to the attorneys, no government pension plan in the country has ever lost its tax exempt status. We will continue to work to have the terms of Act 1 implemented.
 
Gov. David Ige has reached out to HGEA to continue discussions regarding the transition of the Maui Region hospitals to Kaiser Permanente.
 
More information will be provided as it becomes available.

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