The State and University of Hawaiʻi understand the importance of retirement planning and offer its employees a variety of retirement savings plans: a plan through the Employees’ Retirement System that provides a lifetime retirement benefit when age and service requirements are met; a plan for part-time, temporary and seasonal employees; and the optional tax deferred annuity and deferred compensation programs.

The Employees’ Retirement System (ERS) is a department under the State of Hawaiʻi Department of Budget and Finance that is governed by a Board of Trustees to provide a pension plan for Hawaiʻi State and county government employees.

The retirement plans provide a lifetime retirement benefit if age and service requirements are met. The formula takes into account years of creditable service and average salary over a specified period of time.

  • If an employee has service comprised of periods including both part-time and full-time employment, the part-time service will be converted to full-time equivalent service or vice-versa, for the purpose of determining average final compensation and the retirement allowable payable.
  • Regardless of the method of conversion used, the part-time or full-time service shall conform to the same basis of part-time or full-time salary used to determine average final compensation.

Eligibility

  • To be eligible for ERS membership the employee must be employed in a position working 20 or more hours per week and more than 90 days in duration.
  • Graduate Assistants are not eligible for ERS membership.
  • Eligible employees are required under Hawaiʻi law to become members of the ERS as a condition of employment.

Enrollment

  • The designated HR Representative will provide the necessary enrollment and beneficiary forms as part of the hiring packet.

The ERS offers three defined benefit plans – Contributory, Non-Contributory and Hybrid

Under the Contributory plan and Hybrid plan, the State contributions are not credited to the employee’s account and are not refundable to the employee. The State contributions along with ERS investment earnings are used to pay retirement benefits to retirees and beneficiaries. Federal tax law limits the amount of compensation that may be taken into account in calculating tax-qualified pension benefits paid by the ERS.

Detailed information regarding the ERS plans and various retirement options may be found on the ERS website.

Planning to retire?

The Hawaiʻi State law requires all State and County retirees and dependents to enroll in Medicare Part B when eligible for the Hawaiʻi Employer-Union Health Benefits Trust Fund (EUTF) retiree medical and/or prescription drug plan. Retirees and dependents may be eligible for Medicare part B premium reimbursement.

The University understands the importance of individualized retirement planning. In addition to the pension from the State Employees’ Retirement System (ERS), other retirement savings plans are available. These retirement plans are voluntary and eligible employees may participate in one or both plans:

  • The State of Hawaiʻi 457 Deferred Compensation Plan known as the “Island Savings Plan” (ISP) and/or
  • The University’s 403(b) Tax Deferred Annuity Program (TDA).

Contributions are payroll deducted and made before taxes are withheld, thus enabling the employee to build a retirement nest egg and save on withholding taxes with each paycheck. Taxes are paid when funds are distributed, normally at retirement.

To determine the differences between the ISP and TDA programs, refer to the comparison sheet. Employees separating from service (i.e., resignation, retirement, termination) may consider participating in the Vacation Pay Deferral Program and deferring the compensation received for unused vacation leave credits into the supplemental retirement plans for tax savings.

UH 403(b) program and the State’s 457 Deferred Compensation Plan 2017 Maximum Contribution Limits:

  • Employees under the age of 50 – The annual base deferral limit remains unchanged at $18,000;
  • Employees age 50 and higher – There was also no change in the Age 50 catch-up limit. Employees age 50 and higher may contribute up to $24,000 ($18,000 + $6,000).

Remember:

  • UH employees may choose to participate in both the 403(b) Tax Deferred Annuity Program and the 457 Deferred Compensation Plan.
  • Each plan has a separate annual contribution limit; therefore, an employee may defer up to $18,000 or $24,000 in each plan.

Known as the “Island Savings Plan,” the plan complies with the provisions of Section 457 of the Internal Revenue Code. The Island Savings Plan (ISP) is available to employees eligible to participate in the State of Hawaiʻi Employees’ Retirement System (ERS). The plan is currently administered by Prudential Retirement.

To enroll and for more information, please contact the Island Savings Plan Honolulu Office toll-free at 1-888-712-5642, press 2 or visit the Island Savings Plan website.

All faculty, staff, and student employees are eligible to participate in the 403(b) retirement plan sponsored by the University of Hawaiʻi. The program complies with Section 403(b) of the Internal Revenue Code and is currently administered by National Benefit Services (NBS).

For more information, please contact NBS toll-free at 1-800-274-0503 ext. 504, email uh403b@nbsbenefits.com or visit the National Benefit Services website.

How to Enroll

To enroll, eligible employees (including student employees) should:Select and contact any of the authorized TDA service providers listed on the NBS website.

  1. Seek advice from your personal financial advisor and establish your 403(b) account.
  2. After processing an account application with the TDA service provider or your financial advisor
  3. Complete a UH Form 82, UH 403(b) Salary Reduction Agreement
  4. Submit it to NBS via fax or mail

For more information about enrollment, watch the Enrollment/Plan Setup Video

Current copies of the UH Form 82, a listing of due dates and other forms may be downloaded and printed from the NBS website.

The State of Hawaiʻi Part-Time, Temporary, Seasonal Deferred Compensation Retirement Plan (PTS Plan) is an alternative retirement program in place of contributions to Social Security (Medicare contributions still applies). Part-time (less than 50% FTE), temporary, or seasonal/casual employees, who are not eligible to participate in the State Employees’ Retirement System will be automatically enrolled in the State’s PTS Plan. The designated HR Representative will provide the necessary enrollment and beneficiary forms as part of the hiring packet. Each pay period, 7.5% of the gross pay will be deducted and placed in an interest-bearing PTS Plan account.

Detailed information is available in the PTS Plan Employee Information Booklet or contact Comprehensive Financial Planning/Life Insurance Company of the Southwest (CFP/LSW) local office at 596-7006 or neighbor islands toll-free at 1-800-600-7167. Employees may access their account information through their plan participant account.

Employees retiring from the State may be eligible for health insurance benefits. The employer contributes to the health insurance premiums based on the hire date and the number of years of ERS credited service at the time of retirement. Employees are eligible to enroll in any available plan at the time of your retirement regardless of health plans in/not enrolled in prior to retirement.

Years of Credited Service State’s Base Monthly Contribution (BMC)
(Excludes sick leave at retirement) If You Were Hired On or Before 7/1/96 If You Were Hired On or Between 7/1/96 – 6/30/01 **If You Were Hired On or After 7/1/01 (self only)
Less than 10 years 50% 0% 0%
10 but less than 15 years 100% 50% 50%
15 but less than 25 years 100% 75% 75%
25 or more years 100% 100% 100%

The employer’s percentage of the Base Monthly Contribution (BMC) for the year determines the maximum employer contribution payable. Any difference between the base monthly contribution and the total premium for plans selected will be paid by the retiree. **Employees hired on or after 7/1/2001, the monthly employer sponsored contribution will be calculated on the Base Monthly Contribution (BMC) for a single rate ONLY. Employees may obtain coverage for their spouse, domestic partner, or civil union partner but will be responsible for the full premium cost.

Item Employee Plans Retiree Plans
Child Dependent Eligibility for Medical and Prescription Drug Covered until age 26 Covered under 19 if unmarried and living with the retiree, and 19 through 23 if the child is unmarried, living with the retiree (except for full-time students away at college) and a full-time student.
Annual Physical Exams Covered Covered under United Healthcare and EUTF Kaiser plans. EUTF HMSA plan will offer annual physical exams effective 01/01/2017. Medicare Part B covers an Annual Wellness Visit.
Chiropractic Benefit Covered Not covered under EUTF retiree plans. Covered under HSTA VB retiree plans
CVS and Kaiser Prescription Drug Benefits In general, a higher copayment for preferred and other brands as compared to retiree plans. In general, lower copayments for preferred and other brands as compared to active employee plans
Dental Benefits Restorative, endodontic, periodontal, oral surgery and adjunctive general services – covered at 80% (except for crowns and gold restorations which are covered at 60%). Orthodontic benefits – covered at 50%. Restorative, endodontic, periodontal, oral surgery and adjunctive general services – covered at 60%. No orthodontic benefit
Medicare Part B Enrollment is optional, but not required. Medicare Pare B premiums are not reimbursed Enrollment is mandatory for EUTF retirees and their dependents who are covered under retiree medical and/or prescription drug plans and are eligible for Medicare Part B. Failure to enroll into Medicare Part B will result in their disenrollment from EUTF retiree medical and/or prescription drug plans. Medicare Part B premium reimbursement is available for retirees and their spouse or partner (civil union or domestic partner) who pay Medicare Part B premiums. Medicare Part B premium reimbursement is not available for retirees who do not pay Medicare Part B premiums or for retiree dependent children with Medicare Part B.

NOTE: This list is not comprehensive and detailed so you should also review the Active Employee and Retiree Reference Guides at the EUTF Website and compare the plan benefits and/or call your health benefits insurance carriers.

Life insurance is offered by the Hawai‘i Employer-Union Health Benefits Trust Fund (EUTF) and the monthly premium is paid by the State of Hawai‘i. An employee may elect life insurance when enrolling in the EUTF health plan by checking “USAble Life” on the EC-2: Enrollment Form for Retirees. For more information, contact the USAble Life at (808) 538-8920 or toll-free at 1(855) 207-2021 or visit the USAble Life website.

Social Security may be part of the retirement income. Employees may receive a lifetime benefit as early as age 62 or wait to receive full retirement benefits based on the birth year. The Social Security program’s benefits include retirement income, disability income, Medicare and Medicaid, and death and survivorship benefits. To learn more about Social Security visit the Social Security website:

The Vacation Pay Deferral Program is comprised of 2 sub-programs, Post-Separation Vacation Pay Deferral Program and Early Vacation Payout Program. These are voluntary programs that provide University employees the ability to shelter their compensation received for unused vacation leave credits to the State of Hawaiʻi 457 Deferred Compensation Plan known as the “Island Savings Plan” (ISP) and/or the University’s 403(b) Tax Deferred Annuity Program (TDA) due to separation from service (i.e. resignation, retirement, termination, etc.).

Deferring pay for unused vacation leave credits (usually a sizable amount) can provide tax-savings on such pay, in addition to significantly increasing an employee’s retirement savings. Employees are recommended to contact a financial advisor to determine if participating in the Vacation Pay Deferral Program is the right thing to do.

Employees with unused vacation may participate in the Post-Separation Vacation Pay Deferral Program. Employees retiring on November 1, December 1 or December 31 may consider participate in the Early Vacation Payout Program if their vacation pay exceeds the annual contribution limit of both the ISP and TDA plans. Employees may contact their HR Representative for more information.

Employees may defer pay for unused vacation leave after separation from service (i.e. resignation, retirement, termination). The deferral of the vacation pay must occur within 2-1/2 months from the date of separation or by the end of the calendar year in which an employee’s separation from service occurs, whichever is later. Pay receive after separation from service may be deferred to the State of Hawaiʻi 457 Deferred Compensation Plan (Island Savings Plan (ISP)) and/or University’s 403(b) Tax Deferred Annuity Program (TDA) if the following requirements are met:

  1. The deferral request is made while employed with the University (no alter than fourteen (14) days prior to the last date of employment (COB date); and
  2. Deferral takes place within 2-1/2 months (approximately 75 calendar days) from the date of separation from service (COB date) or by the end of the calendar year in which the separation from service takes place, whichever is later; and
  3. The deferral is within the applicable annual contribution limits, as established by the Internal Revenue Service (IRS). (To receive assistance in determining the contribution limit for the State of Hawaiʻi 457 Deferred Compensation Plan, please call an Island Savings Plan representative from the Prudential Retirement – Honolulu Office at 1-888-712-5642 and pressing ‘2’ when prompted. For assistance on the University’s 403(b) Tax Deferred Annuity Program, please contact National Benefit Services (NBS) at 1-800-274-0503 x668.)
  4. Submit the necessary Post-Separation Vacation Payout forms by the stated deadlines.

Any portion of the unused vacation pay that is not deferred will be paid in the usual manner for post-separation pay. All State and Federal taxes shall apply.

ISP PSVPD Program

TDA PSVPD Program

Contact your financial advisor for assistance.

The Early Vacation Payout (EVP) program allows the payout and deferral of pay received for unused vacation leave credits prior to the employee’s separation from service (restricted to employees planning to retire). Employees participating in the EVP Program may also participate in the Post-Separation Vacation Pay Deferral Program. To participate in the EVP Program the employee must:

  1. be retiring and have a planned retirement date; and
  2. have a vacation balance of at least 80 hours or any other applicable amount that is the equivalence of 10 vacation days; and
  3. submit necessary Early Vacation Payout forms by the stated deadlines (see Early Vacation Payout Schedule).

Any portion of the unused vacation pay not deferred under the Early Vacation Payout Program will be paid in the usual manner after separation.

ISP EVP Program

TDA EVP Program

Contact your financial advisor for assistance.