State’s public pension system in need of reform

Hawaii’s public pension system needs to be reformed. Why? Because it calculates employee benefits based on the last three years of pay received, including overtime. This incentivizes government employees to accumulate overtime just prior to retirement, a practice known as pension spiking.

In 2016, a freeze was put on Maui firefighters’ participation in community service events. Firefighters would sometimes receive overtime for their community service contributions but, that year, the budget was too tight.

In September, the freeze was lifted, but the system that incentivizes excessive overtime has not been changed.

Hawaii’s county employees already make some of the highest wages in the nation — even when adjusted for cost of living. And some firefighters on Maui make double their yearly salary in overtime.

Participating in community events can be a wonderful service for Hawaii firefighters, and overtime pay might be necessary on occasion to help facilitate it. But, when it’s exploited, the very communities being served literally end up paying the price.

Let’s reform Hawaii’s public pension rules to make sure that doesn’t happen.

Aaron Lief,

Researcher, Grassroot Institute of Hawaii