FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
16-JAN-2025
07:46 AM
Dkt. 52 OP
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
---o0o---
RANDOLPH R. SLATON and SEIKO KAWANO, Plaintiffs-Appellants,
v.
STATE OF HAWAI‘I; THE BOARD OF TRUSTEES OF THE STATE OF HAWAI‘I
EMPLOYER-UNION HEALTH BENEFITS TRUST FUND, in their official
capacities; THE ADMINISTRATOR OF THE STATE OF HAWAI‘I EMPLOYER-UNION HEALTH BENEFITS TRUST FUND, in his official capacity,
Defendants-Appellees,
and
JOHN DOES 1-100; MARY ROES 1-100; DOE PARTNERSHIPS 1-100; DOES
TRUSTS 1-100; DOE ENTITIES 1-100; DOE ESTATES 1-100; and DOE
CORPORATIONS 1-100, Defendants
NO. CAAP-XX-XXXXXXX
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 1CC191000073)
JANUARY 16, 2025
HIRAOKA, PRESIDING JUDGE, WADSWORTH AND NAKASONE, JJ.
FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
OPINION OF THE COURT BY NAKASONE, J.
This appeal concerns whether a retired public employee
with non-continuous employment is entitled to full or partial
contribution by the State of Hawai‘i toward his retiree health
insurance premiums, under Hawaii Revised Statutes (HRS) Chapter
87A, "Hawaii Employer-Union Health Benefits Trust Fund" (EUTF).
The statutes at issue in this case prescribe 100% or partial
employer contribution based on date of hire and years of
service. 1
The retired public employee in this case, PlaintiffAppellant Randolph R. Slaton (Slaton) had two separated periods
of public employment, from 1975 to 1978, and 2006 to 2015,
totaling 15 years and nine months of service 2 with two different
dates of hire. Between these two public employment periods,
Slaton had a 27-year break in his years of service, and the
employer contribution law changed. Slaton challenges the EUTF's
calculation upon his December 31, 2015 retirement, of the
employer contribution applicable to Slaton using Slaton's last
date of hire in 2006, instead of his earlier date of hire in
1975.
We hold that: (1) under Dannenberg v. State, 139
Hawai‘i 39, 53, 383 P.3d 1177, 1191 (2016), Slaton did not
1 These statutes, HRS §§ 87A-33, -35, and -36, quoted infra,
comprise a three-tier statutory employer contribution framework based on the
employee's date of hire: (1) retirees hired before July 1, 1996 under HRS §
87A-33(a)(5) (Tier 1); (2) retirees hired after June 30, 1996 and before July
1, 2001 under HRS § 87A-35 (Tier 2); and (3) retirees hired after June 30,
2001 under HRS § 87A-36 (Tier 3).
2 The record reflects the Hawai‘i Employees' Retirement System (ERS)
reported to Slaton that his credited service consisted of 12 years and 2
months of "Hybrid Benefit Service," 3 years and 7 months of "Noncontributory
Benefit Service," and an additional 1 year and 11 months of credited military
service from November 1, 2002 through September 30, 2004.
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satisfy the condition precedent under the employer contribution
law applicable to his 1975 to 1978 employment, to receive the
100% employer contribution benefit; and thus, there was no
benefit attributable to his "past services" in 1975 to 1978
subject to the non-impairment clause of the Hawai‘i
Constitution, 3 when the employer contribution law subsequently
changed with respect to the "future services" Slaton rendered in
2006 to 2015; 4 and (2) under the employer contribution law
applicable to Slaton's 2006 to 2015 term of employment, Slaton
did not qualify for the 100% employer contribution benefit based
on his earlier 1975 date of hire, because HRS § 87A-33(a)(5) and
its related text in HRS § 87A-35(a)(2) did not apply where there
was a break in the ten-year service requirement; and thus, the
partial employer contribution benefit under HRS § 87A-36, based
on Slaton's last date of hire in 2006, applies in this case.
Plaintiffs-Appellants Slaton, a licensed attorney
representing himself, and his dependent-beneficiary, Seiko
Kawano (collectively, Appellants) appeal from the June 25, 2020
"Final Judgment on Count I (Declaratory Relief)" (Final
Judgment) in favor of Defendants-Appellees, State of Hawai‘i, the
EUTF Board of Trustees, and the EUTF Administrator
3 Article 16, section 2 of the Hawai‘i Constitution sets forth what
is referred to as the "non-impairment clause," which states: "Membership in
any employees' retirement system of the State or any political subdivision
thereof shall be a contractual relationship, the accrued benefits of which
shall not be diminished or impaired." Everson v. State, 122 Hawai‘i 402, 408,
228 P.3d 282, 288 (2010).
4 See Dannenberg, 139 Hawai‘i at 51, 383 P.3d at 1189 (explaining
that the legislature had flexibility to make changes so long as accrued
benefits were not impaired, by "reduc[ing] benefits as to persons already in
the system in so far as their future services were concerned, but [the
legislature] could not, however, reduce the benefits attributable to past
services" (quoting Everson, 122 Hawai‘i at 416,
228 P.3d at 296)). Both
Dannenberg and Everson are discussed infra.
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(collectively, the State); and the May 21, 2020 orders granting
and denying the parties' cross-motions for partial summary
judgment (Cross-MPSJs) on Count I (MPSJ Orders). The MPSJ
Orders and the Final Judgment on Count I were all filed and
entered by the Circuit Court of the First Circuit (Circuit
Court). 5
On appeal, Appellants contend that the Circuit Court
erred in granting the State's MPSJ and in denying Appellants'
MPSJ, "based on its wrong conclusion that the last date of
[Slaton's] hire controlled the employer premium contribution."
We affirm.
I. BACKGROUND
Appellants' January 14, 2019 Complaint raised four
causes of action: Count I for "Declaratory Relief," Count II
for "Violation of the Hawai‘i Constitution," Count III for
"Accounting and Reimbursement," and Count IV for "Injunctive
Relief." The Complaint alleged that Appellants were entitled to
100% employer contribution for their retirement health insurance
premiums under HRS § 87A-33(a)(5) based on Slaton's 1975 date of
hire; and the alleged 25% decrease in the employer contribution
based on the EUTF's calculation using Slaton's 2006 date of hire
violated HRS § 87A-33(a)(5) and Article 16, section 2 of the
Hawai‘i Constitution. The Cross-MPSJs involved Count I, which
stated: "[Appellants] are entitled to a declaration that § 87A-
33(a)(5), H.R.S., controls their situation and that the 'date of
hire' refers to Plaintiff Slaton's original date of hire and not
his date of re-hire."
Appellants' March 1, 2019 MPSJ advanced the same
argument they raise on appeal, that the EUTF must use Slaton's
earlier 1975 date of hire; and that pursuant to HRS
5 The Honorable Gary W.B. Chang presided.
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§ 87A-33(a)(5) applicable to retired employees hired before
July 1, 1996, Slaton was entitled to 100% employer contribution
for his health insurance premiums. The State's December 9, 2019
Cross-MPSJ advanced the same argument they raise on appeal, that
Slaton's last 2006 date of hire applies due to Slaton's break in
the ten-year service requirement under HRS § 87A-33(a)(5) and
its related text in HRS § 87A-35; 6 and that pursuant to HRS
6 HRS § 87A-33 provides for an employer contribution that "shall
not exceed the actual cost of the health benefit plan or plans" for
qualifying employee-beneficiaries and their dependent-beneficiaries. The
parties agree that this statute provides for 100% employer contribution for
those meeting the qualifications of the different categories set forth in
subsections (a)(1) through (a)(7). This case involves HRS § 87A-33(a)(5)
(1993 & 2006 Supp.), which applies to Tier 1 retired employees with a pre-July 1, 1996 date of hire, and it states:
§87A-33 State and county contributions; retired
employees. (a) Notwithstanding any law to the contrary,
this section shall apply to state and county contributions
to the fund for:
. . . .
(5) An employee-beneficiary who:
(A) Was hired before July 1, 1996;
(B) Retired after June 30, 1984; and
(C) Who has ten years or more of credited
service, excluding sick leave;
. . . .
HRS § 87A-35 (1993 & 2006 Supp.) provides for partial employer
contribution of 50% or 75% for qualifying retired employees based on their
1996 to 2001 date of hire and years of service. While it applies to Tier 2
retired employees hired after June 30, 1996 and before July 1, 2001, it also
contains an exclusion with a "Break in service" definition relating to the
Tier 1 retired employees with a pre-July 1, 1996 date of hire under HRS §
87A-33, as follows:
§87A-35 State and county contributions; employees
hired after June 30, 1996, but before July 1, 2001, and
retired with fewer than twenty-five years of service. (a)
This section shall apply to state and county contributions
to the fund for employees who were hired after June 30,
1996, but before July 1, 2001, and who retire with fewer
than twenty-five years of credited service, excluding sick
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§ 87A-36 applicable to retired employees hired after June 30,
2001, 7 Slaton was entitled to partial employer contribution.
leave; provided that this section shall not apply to the
following employees, for whom state and county
contributions shall be made as provided by section 87A-33:
(1) An employee hired prior to July 1, 1996, who
transfers employment after June 30, 1996, and who
cumulatively accrues at least ten years of
credited service; and
(2) An employee hired prior to July 1, 1996, who has
at least ten years of credited service prior to a
break in service.
For purposes of this section:
"Break in service" means to leave state or county
employment for more than ninety calendar days before
returning to state or county employment.
"Transfer" means to leave state or county employment
and return to state or county employment within ninety
calendar days.
. . . .
(Emphases added.) Under HRS § 87A-35(a)(2)'s underscored text above that we
apply infra, retired employees with a pre-July 1, 1996 date of hire must have
ten years of unbroken service to qualify for the 100% employer contribution
under HRS § 87A-33(a)(5).
7 HRS § 87A-36 (1993 & 2006 Supp.) provides for 50%, 75%, or
100% employer contribution for Tier 3 retired employees based on their afterJune 30, 2001 date of hire and years of service, as follows:
§ 87A-36 State and county contributions; employees
hired after June 30, 2001, and retired. (a) This section
shall apply to state and county contributions to the fund
for employees hired after June 30, 2001, and who retired,
except that this section shall not apply to the following
employees, for whom state and county contributions shall be
made as provided by section 87A-35:
(1) An employee hired after June 30, 1996, and prior
to July 1, 2001, who transfers employment after
June 30, 2001, and who cumulatively accrues at
least ten years of credited service; and
(2) An employee hired after June 30, 1996, and prior
to July 1, 2001, who has at least ten years of
credited service prior to a break in service.
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Following the February 11, 2020 hearing on the Cross-MPSJs on Count I, the Circuit Court granted the State's MPSJ and
denied Appellants' MPSJ, as follows:
THE COURT: Okay. I think that it's very
clear that in 2001, when Chapter 87A was enacted,
that the legislature did address noncontinuous
government employees and how they were to be treated.
Before that, the statute was not clear and appears to
only suggest what happens in continuous employment
and the employee retires. So it was somewhat vague
as to what a noncontinuous employee's rights were
under the prior Chapter 87.
So the way this court looks at the case, the
primary dispute comes down to the interpretation of
the constitution. Our Hawaii state constitution says
in Article 16, Section 2, that accrued benefits
cannot be diminished or impaired. So the question
becomes whether a higher contribution by the employer
of 100 percent contributions that [Slaton]
claims was available in 1975 when he first joined
government service, and whether that was an accrued
benefit. And this court has considered the record
and the argument of counsel, and the Court concludes
that the 100 percent contribution benefit was not an
accrued benefit as of September 1, 1975.
The concept of accrual is, unfortunately,
not well defined anywhere in the law, so this court
relies upon common definition [sic] of accrued, that
[(Definitions for "[b]reak in service" and
"[t]ransfer" identical to the definitions in the
prior section, HRS § 87A-35, are included.)]
. . . .
(c) The State, . . . shall pay to the fund:
. . . .
(2) For retired employees based on the self plan with
at least fifteen but fewer than twenty-five years
of service, a monthly contribution equal to
seventy-five per cent of the base medicare or
non-medicare monthly contribution set forth under
section 87A-33(b);
. . . .
The State claims that the 75% employer contribution in HRS § 87A-36(c)(2),
for 15 to 25 years of service, applies to Slaton.
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something must -- and I'll incorporate a concept that
has been used but not defined -- that something must
vest. Potential benefits have not accrued until they
somehow vest in some fashion. And this record is
absent any evidence or legal showing that when
[Slaton] left government employment in 1978 to enter
private practice for 27 years, that there was no
criteria that was satisfied so that any retirement
rights had vested or accrued to [Slaton] as of
that November 12, 1978 separation from employment
date, and so, therefore, all of the principles that
restrict government from diminishing or impairing
[Slaton]'s retirement rights were not triggered as
of the November 12, 1978 separation from employment
by [Slaton].
So the 2001 enactment of Chapter 87A, which
replaced Chapter 87, Chapter 87 being on the books at
the time [Slaton] first joined the attorney
general's office -- excuse me -- University of
Hawaii's legal office on September 1, 1975, that
Chapter 87 was repealed and replaced by Chapter 87A
in 2001. At that time, in 2001, [Slaton] was
not yet back to government service, but returned to
government service on or about January or February
2006. And so, therefore, the record indicates that
[Slaton] was re-enrolled into the retirement
system on February 1, 2006, and the February 1, 2006
date brought a different contribution level of the
employer. Instead of 100 percent that was on the
books in 1975, when [Slaton] rejoined government
service in 2006, the applicable contribution by the
employer was reduced to 75 percent or some percent
lower than 100 percent. And that difference in
employer contribution the Court now understands is
the reason why this action was filed, as [Slaton]
was seeking 100 percent contributions that were
applicable in 1975 but had not yet accrued because
the separation of employment did not satisfy the
criteria necessary to qualify [Slaton] for
retirement benefits.
Now, there are a couple of issues the Court
wishes to quiet in its decision. First, there are a
number of very interesting quotation of language by our
supreme court in the Dannenberg case and the Everson case,
E-V-E-R-S-O-N, Everson, but those cases did not involve
noncontinuous government employees in the retirement
system, so that issue of how noncontinuous employees were
to be treated was never specifically raised. In all of the
interesting language from Dannenberg regarding when do
retirement benefits accrue, and they accrue upon enrollment
in the retirement system, were all in the context of a
continuous government employee.
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So what we have in the case at bar is a noncontinuous
government employee and how that employee's enrollment and
years of credited service affect his right to retirement
benefits. And the Dannenberg court in particular was astute
to note that its decision in the Dannenberg case was not
applicable to noncontinuous employees' circumstances. So
this court does not necessarily rely upon the principles
espoused in Dannenberg until a noncontinuous employee is
vested with certain employee benefits, and only upon
vesting do the rights accrue and cannot be impaired or
diminished by a legislative act or government action. So
the Court views its ruling in this case as not being
inconsistent with the principles espoused in Dannenberg or
Everson.
The final point the Court wished to make is relating
to the question of impairment of contracts. And the Court
concludes that the facts in this case do not indicate an
impairment of a contract because there was no contract
between [Slaton] and the [State] for the [State] to provide
100 percent contributions by the employer. That certainly
was a potential at the time [Slaton] entered government
service in 1975 for the first time, however, as the Court
indicated, retirement benefits had not yet vested and,
therefore, they never accrued at the 100 percent employer
contribution level, and therefore there was no such
contract between [Slaton] and the [State]. So there was no
contract to impair when the legislature enacted Chapter 87A
in 2001, so the Court also does not find the impairment of
contract theory as a basis to award remedies to [Slaton].
So, in short, this court finds and concludes that the
[State] w[as] within [its] rights to enforce Chapter 87A as
it was enacted in 2001, and nothing in the [State's]
administration of the [Appellants]' retirement benefits
violated any provision of law or our constitution.
So for these and any other good cause shown in the
record, the Court will respectfully deny the [Appellants]'
motion for partial summary judgment and grant the [State's]
cross motion for summary judgment.
The May 21, 2020 MPSJ Orders filed after the
hearing, concluded that the State "violated no
constitution, statute, regulation or other law by applying
HRS §[]87A-36 to determine the part of retiree health care
plan contributions the government was required to make for
[Appellants]"; and "[Appellants] obtained no right to full
retiree health care contributions from the government under
repealed HRS Chapter 87 which [the State's] application of
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HRS §[]87A-36 could have diminished, because . . . Slaton
did not retire when he left government service in 1978."
On June 25, 2020, the Circuit Court entered Final
Judgment on Count I, following the parties' June 19, 2020
stipulation to the partial dismissal without prejudice of Counts
II, III, and IV. Appellants timely appealed.
II. STANDARDS OF REVIEW
Summary Judgment: "On appeal, the grant or denial of
summary judgment is reviewed de novo." Dannenberg, 139 Hawai‘i
at 49, 383 P.3d at 1187 (citation omitted). "Summary judgment
is appropriate if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue of
material fact and the moving party is entitled to a judgment as
a matter of law." Flores v. Logan, 151 Hawai‘i 357, 367,
513
P.3d 423, 433 (2022) (cleaned up).
Constitutional Law: "Issues of constitutional
interpretation present questions of law that are reviewed de
novo." Dannenberg, 139 Hawai‘i at 50, 383 P.3d at 1188 (citation
omitted).
Statutory Construction: "Statutory interpretation is
a question of law reviewable de novo." Barker v. Young,
153 Hawai‘i 144, 148, 528 P.3d 217, 221 (2023) (citation
omitted). Interpretation of a statute is governed by the
following principles:
First, the fundamental starting point for statutory
interpretation is the language of the statute itself.
Second, where the statutory language is plain and
unambiguous, our sole duty is to give effect to its plain
and obvious meaning. Third, implicit in the task of
statutory construction is our foremost obligation to
ascertain and give effect to the intention of the
legislature, which is to be obtained primarily from the
language contained in the statute itself. Fourth, when
there is doubt, doubleness of meaning, or indistinctiveness
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or uncertainty of an expression used in a statute, an
ambiguity exists.
When there is ambiguity in a statute, "the meaning of the
ambiguous words may be sought by examining the context,
with which the ambiguous words, phrases, and sentences may
be compared, in order to ascertain their true meaning."
Moreover, the courts may resort to extrinsic aids in
determining legislative intent, such as legislative
history, or the reason and spirit of the law.
Id. (citation omitted).
III. DISCUSSION
Slaton advances two principal arguments for his
contention on appeal that his earlier date of hire controls the
employer contribution in this case: (1) a constitutional
argument based on the non-impairment clause of Article 16,
section 2 of the Hawai‘i Constitution protecting "accrued"
benefits arising from membership in a retirement system, that
"the original date of hire determines when benefits accrue," and
Slaton's 100% employer contribution benefit accrued in 1975; and
(2) a statutory interpretation argument that HRS § 87A-33(a)(5),
applicable to employees hired before July 1996, is unambiguous
and should be applied to Slaton, rather than HRS § 87A-36,
applicable to employees hired after July 2001. We address both
arguments below.
A. The Hawai‘i non-impairment clause cases
The non-impairment clause in Article 16, section 2 of
the Hawai‘i Constitution mandates that "accrued benefits" from
"[m]embership in any employees' retirement system" of state or
local government "shall not be diminished or impaired." Haw.
Const. Art. XVI, § 2. The following cases inform our analysis
of how to apply the non-impairment clause in this case.
Chun (1980)
In Chun v. Emps.' Ret. Sys., 61 Haw. 596, 596-97,
607 P.2d 415, 416-17 (1980), the Hawai‘i Supreme Court upheld the
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enforcement of a statutory ERS application deadline in HRS § 88-
73(1), of "not less than thirty days" prior to the designated
retirement date, where the employee died nine days after filing
his retirement application, in a lawsuit brought by the
beneficiary against the ERS, claiming certain retirement
benefits were due. The beneficiary argued, inter alia, that her
claim should be "scrutinized under principles of contract law"
given the "contractual relationship" between an employee and ERS
under language in Article 16, section 2 of the Hawai‘i
Constitution. Id. at 605, 607 P.2d at 421. This case was the
Hawai‘i Supreme Court's first occasion to interpret the non-impairment clause that was the basis of the beneficiary's
argument. The court noted, "[t]his court has never been called
upon to examine or construe this particular provision of the
Hawaii Constitution."
Id. The Chun court quoted the following
passage from the Committee of the Whole's Report (1950 Committee
of the Whole Report) from the 1950 Constitutional Convention,
explaining that the constitutional provision would limit the
legislature from reducing "benefits attributable to past
services" that were "already accrued[,]" but not limit the
legislature from reducing benefits for the "future services" of
those already in the system:
It should be noted that the above provision would not limit
the legislature in effecting a reduction in the benefits of
a retirement system provided the reduction did not apply to
benefits already accrued. In other words, the legislature
could reduce benefits as to (1) new entrants into a
retirement system, or (2) as to persons already in the
system in so far as their future services were concerned.
It could not, however, reduce the benefits attributable to
past services. Further, the section would not limit the
legislature in making general changes in a system,
applicable to past members, so long as the changes did not
necessarily reduce the benefits attributable to past
services.
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Id. at 605-06,
607 P.2d at 421 (citing Comm. of the Whole Report
No. 18, Journal of the Const. Con. of 1950, p. 330). Relying on
the rationale of the 1950 Committee of the Whole Report above,
the Chun court explained that the constitutional provision
protected an employee "from a reduction in accrued benefits[,]"
but the extent of the benefits and conditions for their receipt
were governed by statute:
[W]e conclude that the provision was meant to protect an
employee from a reduction in accrued benefits. However,
the extent of such benefits as well as the conditions under
which an employee should receive benefits, are governed by
applicable statutory provisions, among which is the
condition expressed in HRS § 88-73(1).
Id. at 606, 607 P.2d at 421 (emphasis added).
Kaho‘ohanohano (2007)
In Kaho‘ohanohano v. State, the supreme court held,
inter alia, that a statutory amendment that did not allow the
ERS to retain one hundred percent of its excess earnings in
certain years (Act 100) violated Article 16, section 2 of the
Hawai‘i Constitution. 114 Hawai‘i 302, 310, 162 P.3d 696, 704
(2007). The Kaho‘ohanohano court explained that the intent of
the framers of Article 16, section 2 at the proceedings of the
1950 Constitutional Convention of Hawai‘i when the delegates
added the word "accrued" before "benefits[,]" was "to preserve
the accrued benefits but still leave the legislature free as to
the future." Id. at 343, 162 P.3d at 737. The supreme court
relied on the same language from the 1950 Committee of the Whole
Report, quoted supra in Chun, that benefits "attributable to
past services" that were "already accrued" could not be reduced,
but the legislature could reduce benefits for "future services"
"as to persons already in the system." Id. at 344, 162 P.3d at
738 (citing Comm. of the Whole Report No. 18, Journal of the
Const. Conv. of 1950, Vol. 1, at 330).
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Everson (2010)
In Everson, retired public employees challenged
whether EUTF health benefit plans available to them were
constitutionally protected under the non-impairment clause, and
raised a second issue not pertinent here, regarding whether HRS
Chapter 87A required the EUTF to provide retirees with the same
or similar health benefit plans provided to active employees.
122 Hawai‘i at 404, 228 P.3d at 284. The supreme court rejected
the State's arguments that the non-impairment clause did not
apply because retiree health benefits did not arise from ERS
membership; and because health benefits were not "accrued
benefits" like financial benefits such as pensions, which could
accumulate or accrue.
Id. at 408,
228 P.3d at 288.
Construing the word "system" to mean the ERS, the
Everson court noted that membership in the ERS is "mandatory"
for all public employees who "enter or reenter" state or county
service, "at the time of their entry or reentry." Id. at 415,
228 P.3d at 295 (citing HRS §§ 88-21, 88-42). Because a retired
public employee's eligibility for health benefits under the EUTF
in HRS Chapter 87A was conditioned on "being a retired member of
the [ERS,]" id. at 417,
228 P.3d at 297 (internal citations
omitted), the Everson court held that the health benefits
included in the EUTF's "health benefits plan for retirees
constitute an accrued benefit arising from a person's membership
in an [ERS]."
Id. at 407,
228 P.3d at 287 (capitalization
altered). Citing the framers' intent in the 1950 Committee of
the Whole Report set forth supra, the Everson court held that
"health benefits for retired state and county employees
constitute 'accrued benefits' pursuant to article XVI, section 2
of the Hawai‘i Constitution." Id. at 419,
228 P.3d at 299.
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As noted in the subsequent Dannenberg case, 139 Hawai‘i
at 52, 383 P.3d at 1190, the Everson court "declined to
specifically address when retirement health benefits are accrued
and what retiree health benefits must be deemed as accrued
benefits." The Everson court also expressly declined to address
whether the employer contribution at issue in the present case
was similarly protected by the non-impairment clause, stating
that "whether the state or county government's contribution to
the EUTF is protected by Hawaii's non-impairment clause is not
the issue in this case." 122 Hawai‘i at 418,
228 P.3d at 298.
Dannenberg (2016)
Dannenberg involved a class action lawsuit by retired
state employees alleging that the State impaired accrued
retirement health benefits by not providing retirees with a
health benefits package that was substantially equal to that of
active employees. 139 Hawai‘i at 44, 56, 383 P.3d at 1182, 1194.
The Dannenberg court concluded that there was a genuine issue of
material fact as to whether the retirement health benefits the
appellants received, or would be eligible to receive under the
EUTF, were the same or substantially the same as the health
benefits that active retirees received under the Public
Employees Health Fund (PEHF or Health Fund). 8 Id. at 59,
383
P.3d at 1197.
The Dannenberg court addressed when retirement health
benefits are accrued, and how to determine whether such benefits
had accrued, stating: "We therefore hold that benefits arising
from membership in a Hawai‘i ERS, including retiree health
benefits, accrue upon an employee's enrollment in the ERS,
8 As discussed infra, the PEHF under HRS Chapter 87, which was
repealed in 2001, was the predecessor version of the EUTF under HRS Chapter
87A.
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subject to any conditions precedent in place at the time of
enrollment that must be satisfied before receiving the
benefits." Id. at 53, 383 P.3d at 1191. The court explained
the reasoning for this holding by drawing a distinction between
entitlement to "accrued benefits," and the receipt of benefits,
as follows:
[I]n order to determine whether constitutionally protected
benefits have been diminished or impaired, there must be a
comparison between the "accrued benefits" that an employee
is entitled to and the benefits that the employee has
received. In Everson, the supreme court explained that the
[n]on-[i]mpairment [c]lause "clearly and unambiguously"
provides that "accrued benefits" arise from a State or
county employee's membership in an ERS. 122 Hawai‘i at 415,
228 P.3d at 295. The court observed that this membership
is mandatory for all such employees upon their entry or re-entry into the service of the State or a county. Id.
(citing 2 Proceedings of the Constitutional Convention of
Hawai‘i of 1950, at 495; HRS § 88-42 (Supp. 2008)). It is
with this entry into service, and this mandatory membership
in an ERS, that an employee becomes eligible to receive the
benefits arising from ERS membership, provided that the
employee satisfies the condition(s) precedent to receive
them.
Id. at 52, 383 P.3d at 1190 (emphases added).
The Dannenberg court also expressly "decline[d] to
address the effects of re-entry into service, and re-enrollment
in the ERS, on a Hawai‘i employee's 'accrued benefits,' as those
issues ha[d] not been argued in th[at] case." Id. at 53 n.16,
383 P.3d at 1191 n.16. These issues are presented in this case.
Before we turn to whether Slaton "accrued" the benefit
at issue here, we first answer what was left unaddressed in
Everson, and hold that the employer contributions to the EUTF
for retiree health insurance premiums under HRS Chapter 87A and
its predecessor version discussed infra, are benefits for
retired employees for purposes of Article 16, section 2 of the
Hawai‘i Constitution. The EUTF in HRS Chapter 87A states in its
title that it is a "Health Benefits Trust Fund." HRS § 87A
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(emphasis added). The purpose of the EUTF is "to provide the
employee-beneficiaries and dependent-beneficiaries with health
and other benefit plans." HRS § 87A-31 (1993 & 2006 Supp.)
(emphasis added). The EUTF is funded, in part, by contributions
under HRS § 87A-30, which include the 100% and partial employer
contributions that are the subject of the dispute in this case.
Certainly, from the viewpoint of the employee, the employer
contribution is part of the benefits under HRS Chapter 87A. As
evidenced by the legislative history for the employer
contribution statutes that we discuss infra, the legislature
also viewed the employer contribution as a benefit. See Conf.
Comm. Rep. No. 119-04, in 2004 House Journal, at 2055, cited
infra. While the employer contribution is a benefit for the
public employee, the non-impairment clause only applies to
"accrued benefits." Haw. Const. art. XVI, § 2 (emphasis added).
We address below whether Slaton "accrued" the 100% employer
contribution benefit, subject to any conditions precedent for
receipt of that benefit to trigger the protection of the non-impairment clause. See Dannenberg, 139 Hawai‘i at 53, 383 P.3d
at 1191.
B. The non-impairment clause applicable to accrued
benefits did not apply to Slaton because Slaton had
no benefit from his 1975 to 1978 employment subject
to the non-impairment clause.
Slaton argues that under Everson, 122 Hawai‘i 402,
228 P.3d 282, and Dannenberg, 139 Hawai‘i 39,
383 P.3d 1177, he
was "entitled to benefits that are attributed to, and accrued to
his membership in the system that began on September 1, 1975,
and continued for a total of 15 years"; and that "the 100%
employer contribution accrue[d] upon Slaton's membership in
1975, subject to the condition precedent of years of service."
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The State argues that "applying [HRS] Section 87A-36
to Slaton's 1975-78 employment would not violate the [n]onimpairment [c]lause" because Everson ruled that "accrued"
benefits in the non-impairment clause meant that "past benefits"
could not be impaired; Slaton did not "gain[] any retirement
health benefits based on his 1975-78 employment" "under the 1975
version of Chapter 87"; and thus, there were "no 'past benefits'
that can be diminished." (Bolding omitted.)
In Dannenberg, the supreme court held that retiree
health benefits arising from ERS membership accrue upon ERS
enrollment, subject to any conditions precedent in place at the
time of enrollment that must be satisfied before receiving the
benefits. 139 Hawai‘i at 42, 53, 383 P.3d at 1180, 1191. A
condition precedent must be fulfilled before the obligation to
which it is connected ripens. Brown v. KFC Nat'l Mgmt. Co., 82
Hawai‘i 226, 246,
921 P.2d 146, 166 (1996) ("A condition is an
event, not certain to occur, which must occur, unless its nonoccurrence is excused, before performance under a contract
becomes due." (citing Restatement (Second) of Contracts § 224
(1981)). In other words, if the condition precedent "does not
occur and is not excused, the promised performance need not be
rendered." Condition Precedent, Black's Law Dictionary 369
(12th ed. 2024). When determining whether a certain benefit was
due, the supreme court in Chun explained that "the extent of
such benefits as well as the conditions under which an employee
should receive benefits, are governed by applicable statutory
provisions[.]" 61 Haw. at 606,
607 P.2d at 421. In this case,
the extent of the employer contribution benefit, whether 100% or
partial, as well as whether Slaton satisfied the conditions
precedent to receive the benefit are both disputed.
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1. The law at the time of Slaton's 1975
enrollment and throughout his 1975 to 1978
employment, HRS § 87-6, provided the 100%
employer contribution benefit to an employee
who was retired.
The conditions precedent for Slaton to receive the
100% employer contribution benefit are the statutory
qualifications in place at the time of Slaton's enrollment in
the ERS in 1975. See id.; Dannenberg, 139 Hawai‘i at 53, 383
P.3d at 1191. Here, the parties do not dispute that Slaton was
an ERS member during his public employment periods and that he
retired as an ERS member. When Slaton became a public employee
and enrolled in the ERS in 1975, the pertinent employer
contribution statute in effect at that time was HRS § 87-6, 9
which contained no years of service or date of hire
requirements. HRS § 87-6 provided that only a retired employee-beneficiary received the 100% employer contribution. The
pertinent retirement law in effect at the time of Slaton's 1975
enrollment and his 1975 to 1978 employment was set forth in HRS
§§ 88-63(4) and 88-64(1). These retirement statutes required
that an ERS member have five years of service under HRS § 88-
63(4), and be at least 55 years of age under HRS § 88-64(1) for
retirement eligibility. 10
9 HRS § 87-6 (1968 & 1975 Supp.) (repealed), entitled
"Contributions by an employee-beneficiary," provided:
. . . .
Notwithstanding any other law to the contrary, . . .
an employee-beneficiary who is a retired employee, . . .
shall not be required to make any contribution to the fund.
The monthly contribution of . . . an employee-beneficiary
who is a retired employee, . . . shall be financed by the
State through the department of budget and finance for each
of their respective employee-beneficiaries.
(Emphasis added.)
10 HRS § 88-63(4) (1968 & 1975 Supp.), entitled "Service
retirement," provided: "Notwithstanding any other provision of this section,
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2. Slaton did not satisfy the applicable
conditions precedent at the time of his 1975
enrollment as set forth in HRS § 87-6, that he
be "retired" to receive the 100% employer
contribution.
The 100% employer contribution benefit accrued upon
Slaton's 1975 enrollment in ERS, subject to Slaton satisfying
the conditions precedent set forth in the statutory requirement
"in place at the time of enrollment" for Slaton to receive the
benefit. See Dannenberg, 139 Hawai‘i at 53, 383 P.3d at 1191;
Chun,
61 Haw. at 606,
607 P.2d at 421. It is undisputed that
Slaton did not satisfy the statutory qualifications in HRS
§ 87-6 that were in place at the time of his 1975 ERS enrollment
that he be "retired" to qualify for 100% employer contribution
during his 1975 to 1978 employment. See Chun,
61 Haw. at 606,
607 P.2d at 421. When Slaton enrolled in ERS in 1975, a state
or county employee had to be 55 years old and have five years of
creditable service to be entitled to retirement benefits. HRS
§ 88-63 (1968 as amended by 1969 Haw. Sess. Laws Act 110, § 1 at
107; see § 3 at 129). Slaton was 29 years old and had three
years of service when he left state employment in 1978. He had
not satisfied the conditions precedent to not having to
contribute to the Health Fund as a retiree. When he terminated
his state employment in 1978, the law that applied to a former
ERS member returning to service after being out of service for
four years or more provided that "he shall become a member in
the same manner and under the same conditions as anyone first
entering service . . . . In order to be eligible for any
benefit, he must fulfill the membership service requirements for
a member must have five years of creditable service to be eligible for
service retirement." HRS § 88-64(1) (1968), entitled "Allowance on service
retirement," provided for a "retirement allowance" "[i]f the member has
attained age fifty-five[.]"
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such benefit through membership service after again becoming a
member in addition to meeting any other eligibility requirement
established for such benefit." 1969 Haw. Sess. Laws Act 110,
§ 1 at 106-07. Slaton did not satisfy the condition precedent
in HRS § 87-6 that he be "retired" to receive the 100% employer
contribution benefit during his 1975 to 1978 employment. See
Dannenberg, 139 Hawai‘i at 53, 383 P.3d at 1191.
3. Slaton had no 100% employer contribution
benefit attributable to his past service in
1975 to 1978 subject to the non-impairment
clause, when the employer contribution law
subsequently changed with respect to his
future service.
In all of the non-impairment clause cases set forth
supra, the Hawai‘i Supreme Court drew a distinction between
"benefits attributable to past services," which could not be
reduced, and benefits for "future services," which could be
reduced, stating: "the legislature may also reduce benefits as
to persons already in the system in so far as their future
services were concerned, but it could not, however, reduce the
benefits attributable to past services." Dannenberg, 139 Hawai‘i
at 51, 383 P.3d at 1189 (quoting Everson, 122 Hawai‘i at 416,
228
P.3d at 296); see Chun,
61 Haw. at 605,
607 P.2d at 421;
Kaho‘ohanohano, 114 Hawai‘i at 344, 162 P.3d at 738. The latest
case, Dannenberg, again cited the framers' intent from the 1950
Committee of the Whole Report, and underscored the need to
provide the legislature with "flexibility to make future
changes" to the ERS to ensure its viability, including the
reduction of benefits for future services for those already in
the system, as follows:
Article XVI, section 2 was intended in part to provide
the legislature with flexibility to make future changes
to the retirement system, which included changing the
benefits that are provided to members of an ERS, as
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long as the changes did not reduce an employee's
benefits attributable to past services. . . .
Instead, the word "accrued" was added before "benefits"
to refer to a particular point in time in order to
ensure that any future change to the benefits provided
to a retired state or county employee would not
diminish or impair those benefits that have already
"accrued." As such, with regard to future changes, the
legislature could reduce benefits as to (1) new
entrants into a retirement system, or (2) as to persons
already in the system in so far as their future
services were concerned. It could not, however, reduce
the benefits attributable to past services.
Dannenberg, 139 Hawai‘i at 51-52, 383 P.3d at 1198-90 (emphases
added) (cleaned up) (quoting Everson, 122 Hawai‘i at 419,
228 P.3d at 299).
Here, when Slaton first enrolled in the ERS in 1975,
he had no past service subject to the non-impairment clause. He
did not meet the condition precedent to receive the 100%
employer contribution benefit under HRS § 87-6, the thenexisting statute, during his 1975 to 1978 employment. Thus,
when he left government service in 1978, Slaton was a "person[]
already in the [(ERS)] system," who had attained no benefit
"attributable to [his] past services" in 1975 to 1978, subject
to the non-impairment clause. See id. The framers of the non-impairment clause at the 1950 Constitutional Convention intended
the legislature have the ability to "reduce benefits" "as to
persons already in the system" with regard to their "future
services," see id., and the legislature did so here, by changing
the law for the 100% employer contribution benefit after Slaton
left government service in 1978 and before he returned to public
employment for his future service in 2006 to 2015. Because
Slaton had no 100% employer contribution benefit "attributable
to past services" in 1975 to 1978, there was no "accrued"
benefit subject to the non-impairment clause. See id. Thus,
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the change in the employer contribution law with respect to
Slaton's "future services" in 2006 to 2015 did not violate the
non-impairment clause. See id.
C. Under the 2006 employer contribution law applicable
to his 2006 to 2015 employment set forth in HRS §§
87A-33(a)(5), 87A-35, and 87A-36, Slaton did not
qualify for the 100% employer contribution benefit.
When Slaton returned to public employment on
February 1, 2006, the 2001 legislature had repealed HRS Chapter
87, the PEHF, and replaced it with HRS Chapter 87A, the EUTF, to
take effect in 2003. 2001 Haw. Sess. Laws Act 88, § 1 at 138.
In 2004, the legislature added the "break in service" language
(break-in-service) in the Tier 2 statute, HRS § 87A-35(a), which
referred to the Tier 1 employees hired before July 1, 1996,
under HRS §§ 87A-33(a)(5), as follows:
SECTION 1. Section 87A-35, [HRS], is amended by
amending subsection (a) to read as follows:
"(a) This section shall apply to state and county
contributions to the fund for employees who were hired
after June 30, 1996, but before July 1, 2001, and who
retire with fewer than twenty-five years of credited
service, excluding sick leave; provided that this section
shall not apply to[:] the following employees, for whom
state and county contributions shall be made as provided by
section 87A-33:
(1) An employee hired prior to July 1, 1996, who
transfers employment after June 30, 1996[;
and], and who cumulatively accrues at least ten
years of credited service; and
(2) An employee hired prior to July 1, 1996, who
has at least ten years of credited service [and
who has had] prior to a break in service.
For the purposes of this section[, "transfer"]:
"Break in service" means to leave state or county
employment for more than ninety calendar days before
returning to state or county employment.
"Transfer" means to leave state or county employment
and return to state or county employment within ninety
calendar days."
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2004 Haw. Sess. Laws Act 184, § 1 at 887 (underscoring and
strikeouts in original) (footnote omitted). 11 Thus, the version
of the employer contribution law applicable to Slaton's 2006 to
2015 term of employment, HRS §§ 87A-33(a)(5), 87A-35, and
87A-36, contained the break-in-service provision that was added
in 2004.
1. HRS § 87A-33(a)(5) and its related break-inservice text in HRS § 87A-35(a)(2), which
provide for 100% employer contribution based
on Slaton's 1975 date of hire, do not apply
because Slaton had a break in the ten-year
service requirement.
Slaton contends that the EUTF erred in not following
"the clear dictates of the unambiguous language of [HRS]
§ 87A-33(a)," based on his earlier 1975 date of hire. We do not
agree that the employer contribution law at issue here is
11 Act 184 also made a similar amendment to the Tier 3 statute, HRS
§ 87A-36, to provide for identical break-in-service language that referenced
the Tier 2 employees under HRS § 87A-35, as follows:
SECTION 2. Section 87 A-36, [HRS], is amended by
amending subsection (a) to read as follows:
"(a) This section shall apply to state and county
contributions to the fund for employees hired after June
30, 2001, and who retired, except that this section shall
not apply to[:] the following employees, for whom state and
county contributions shall be made as provided by section
87A-35:
(1) An employee hired after June 30, 1996, and prior to
July 1, 2001, who transfers employment after June 30,
200l[:], and who cumulatively accrues at least ten years of
credited service; and
(2) An employee hired after June 30, 1996, and prior to
July 1, 2001, who has at least ten years of credited
service [and who has had] prior to a break in service.
[(Definitions for "break in service" and "transfer"
provided.)]
2004 Haw. Sess. Laws Act 184, § 2 at 887-88 (underscoring and strikeouts in
original).
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unambiguous when applied to Slaton. Because of his two periods
of public employment, Slaton had two different dates of hire,
and determining which employer contribution statute applies to
him is not straightforward and unambiguous. This is evidenced
by the competing arguments made by the parties here, that
different statutory tiers apply to Slaton based on the two
different dates of hire. Slaton argues that the earlier 1975
date of hire controls, HRS § 87A-33(a)(5) applies to him, and
that HRS § 87A-33(a)(5) has no break-in-service language. The
State argues that the 2006 date of hire under HRS § 87A-36
applies and that Slaton had a break-in-service prior to
acquiring the ten years of continuous service necessary to
qualify for 100% employer contribution under HRS 87A-33(a)(5).
"Laws in pari materia, or upon the same subject
matter, shall be construed with reference to each other. What
is clear in one statute may be called in aid to explain what is
doubtful in another." HRS § 1-16 (2009). In pari materia is "a
doctrine that construes ambiguous laws on the same subject
matter together. We do so because what is clear in one statute
may be called in aid to explain what is doubtful in
another." Alpha, Inc. v. Bd. of Water Supply, 154 Hawai‘i 486,
494, 555 P.3d 173, 181 (2024) (cleaned up). When applying the
in pari materia doctrine, "we are mindful that 'one provision of
a comprehensive statute should be read in the context of the
other provisions of that statute and in the light of the general
legislative scheme.'" Casumpang v. ILWU Local 142, 108 Hawai‘i
411, 421,
121 P.3d 391, 401 (2005) (cleaned up).
The pertinent employer contribution statutes in HRS
Chapter 87A at issue here -- HRS §§ 87A-33, -35, and -36 –– set
forth three tiers of retired employees based on date of hire, to
prescribe whether the employer contribution is full or partial.
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We construe these related statutes together. See id.; Alpha,
154 Hawai‘i at 494, 555 P.3d at 181. HRS § 87A-33(a)(5) (Tier 1)
pertains to employees hired before July 1, 1996; HRS § 87A-35
(Tier 2) pertains to employees hired from July 1, 1996 to July
1, 2001; and HRS § 87A-36 (Tier 3) pertains to employees hired
after July 1, 2001. With regard to retirees with non-continuous
employment, these three sections cross-reference each other,
setting forth qualifications for non-continuous service and
definitions for "[t]ransfer" and "[b]reak in service." The Tier
2 statute, HRS § 87A-35, contains a cross-reference and text
relevant to Tier 1 employees under HRS § 87A-33(a)(5), to
specify under what conditions a Tier 1 employee with a "[b]reak
in service" would qualify for the 100% employer contribution
under Tier 1, HRS § 87A-33(a)(5), as follows:
(a) This section shall apply to state and county
contributions to the fund for employees who were hired
after June 30, 1996, but before July 1, 2001, and who
retire with fewer than twenty-five years of credited
service, . . .; provided that this section shall not apply
to the following employees, for whom state and county
contributions shall be made as provided by section 87A-33:
. . . .
(2) An employee hired prior to July 1, 1996, who
has at least ten years of credited service
prior to a break in service.
HRS § 87A-35(a)(2) (1993 & 2006 Supp.) (emphasis added). 12
If read in isolation, HRS § 87A-33(a)(5) appears to
apply to Slaton, because it applies to an employee who was hired
before July 1, 1996, retired after June 30, 1984, with ten-plus
years of service. Slaton was first hired in 1975, retired after
1984, and had over ten years of service combining his 1975 to
12 The Tier 3 statute, HRS § 87A-36, reflects a similar pattern,
with a cross-reference and text relevant to Tier 2 employees under HRS
§ 87A-35, to specify when a Tier 2 employee under HRS § 87A-35 with a
"[t]ransfer" or "[b]reak in service" would qualify for benefits under Tier 2,
HRS § 87A-35.
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1978 and 2006 to 2015 public employment periods. Because the
adjoining related statute, HRS § 87A-35(a)(2), contains text
expressly referencing and related to HRS § 87A-33(a)(5), these
statutes must be considered together. See Casumpang, 108 Hawai‘i
at 421, 121 P.3d at 401; Alpha, 154 Hawai‘i at 494, 555 P.3d at
181. Read in pari materia, the ten-year service requirement in
HRS § 87A-33(a)(5), means ten years "prior to a break in
service" as explained in HRS § 87A-35(a)(2). See HRS § 1-16.
"[The] rules of statutory construction require
rejection of an interpretation that renders any part of the
statutory language a nullity." Jijun Yin v. Aguiar, 146 Hawai‘i
254, 265, 463 P.3d 911, 922 (2020) (citation omitted). "[W]hen
construing a statute, courts are bound to give effect to all
parts of a statute, and no clause, sentence, or word shall be
construed as superfluous, void, or insignificant if a
construction can be legitimately found which will give force to
and preserve all words of the statute." Adams v. CDM Media USA,
Inc., 135 Hawai‘i 1, 18,
346 P.3d 70, 87 (2015) (cleaned up).
Reading HRS § 87A-33(a)(5) in isolation, as Slaton urges,
renders the text related to HRS § 87A-33 that appears in HRS §
87A-35 a nullity or superfluous. See id. Reading the statutes
in pari materia avoids this result.
Slaton argues that "the 'Notwithstanding [any law to
the contrary]' language in [HRS] § 87A-33(a)(5) is controlling"
over "any other law." This argument is without merit. "We have
repeatedly recognized that one provision of a comprehensive
statute should be read in context of other provisions of that
statute and in light of the general legislative scheme.
Consequently, each part or section should be construed in
connection with every other part or section so as to produce a
harmonious whole." Kam v. Noh, 70 Haw. 321, 326,
770 P.2d 414,
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417-18 (1989) (citations omitted). The prefatory
"[n]otwithstanding any law to the contrary" language in HRS §
87A-33(a)(5) must be construed together with HRS §§ 87A-35 and
87A-36 -- both of which are not "to the contrary" of HRS § 87A-
33(a)(5). See id.; HRS § 1-16.
We conclude that, for purposes of determining Slaton's
date of hire in this case, HRS § 87A-33(a)(5) (Tier 1) based on
Slaton's 1975 date of hire does not apply because Slaton had a
break in the ten-year service requirement under HRS § 87A-
33(a)(5) and its related text in HRS 87A-35(a)(2).
2. HRS § 87A-36, which provides for partial
employer contribution based on Slaton's 2006
date of hire and length of service, applies
in this case.
HRS § 87A-36, providing for partial contribution for
retired employees hired after June 30, 2001, with 15 to 25 years
of service, applies to Slaton based on his 2006 date of hire.
Our conclusion that HRS § 87A-36 applies to Slaton is
supported by the legislative history for the 2004 amendments
that added the break-in-service language at issue in this case.
See Barker, 153 Hawai‘i at 148, 528 P.3d at 221. In 2004, the
legislature specifically considered the lack of clarity in the
100% employer contribution law for Tier 1 retired employees with
a pre-July 1, 1996 date of hire, who had a break in their ten-year service requirement, like Slaton. 13 The legislature
13 The legislature initially intended to provide the same retirement
health benefit to a Tier 1 employee who cumulatively accrued ten years of
service, with or without a break-in-service, as follows:
Your Committee believes that an individual hired
before July 1, 1996, who transfers employment after July 1,
1996, and cumulatively accrues ten years of credited
service or who accrues ten years of credited service before
a break in service, is entitled to receive the same health
benefits upon retirement as an individual who was hired
before July 1, 1996, thereafter accrued ten years of
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ultimately rejected language that would include employees like
Slaton, who had "a break in service and who cumulatively
accrue[d] at least ten years[,]" under the 100% employer
contribution statute, HRS § 87A-33(a)(5). See Conf. Comm. Rep.
No. 119-04, in 2004 House Journal, at 2055. While the bill
initially provided for 100% employer contribution for Tier 1
retired employees with a break in the ten-year service
requirement, this language ended up being deleted due to an
attorney general opinion "reflecting disapproval of the
ramifications" of including these employees, as follows:
The purpose of this measure is to clarify the health
benefits provided upon retirement to public employees who
transferred or experienced a break in service before subsequently
returning to state or county employment.
Specifically, this measure:
(1) Provides that the State or counties will pay the full
base monthly contribution amount for health benefits
plans for an employee hired prior to July 1, 1996,
who:
(a) Transfers employment after June 30, 1996, and accrues at
least ten years of credited service;
(b) Has at least ten years of credited service prior to a
break in service; or
(c) Has had a break in service and who accrues at least ten
years of credited service; and
(2) Provides that the State or counties shall pay a
monthly contribution amount for health benefits
plans, in accordance with section 87A-35, [HRS], for
an employee hired subsequent to June 30, 1996, and
prior to July 1, 2001, who:
(a) Transfers employment after June 30, 2001, and accrues
at least ten years of credited service; and
credited service, and left public service without ever
returning.
S. Stand. Comm. Rep. No. 2686, in 2004 Senate Journal, at 1355-56; see H.
Stand. Comm. Rep. No. 1250-04, in 2004 House Journal, at 1896 (adding a
provision that a Tier 1 employee with cumulative ten years of service would
qualify for the same retirement as those without a break-in-service).
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(b) Has at least ten years of credited service prior to a
break in service.
Your Committee on Conference finds that an employee,
initially hired prior to July 1, 1996, who leaves and then later
returns to public service, may be treated as a new employee for
purposes of determining the level of health benefits to be
provided upon retirement under the [EUTF]. Although such an
employee may have qualified for health benefits upon retirement
that an employee who was hired prior to July 1, 1996, who has not
experience [sic] a break in service, is entitled to receive, it
is unclear under the current law as to how such an individual
will be treated. Therefore, further clarification of the law is
necessary.
Under the current law, public employees hired prior
to July 1, 1996, who accrue at least ten years of credited
service, are entitled to health coverage upon retirement
funded entirely by the State or appropriate county.
Therefore, your Committee on Conference believes that
employees satisfying the aforementioned criteria, who also
either transfer employment or experience a break in
service, should be entitled to receive the same health
benefits upon retirement as an individual who was hired
before July 1, 1996, and leaves public service without
returning with at least ten years of credited service.
Additionally, so as not to diminish any benefits currently
provided under the law, this measure ensures that public
employees hired between June 30, 1996, and July 1, 2001,
who transfer employment and accrue at least ten years of
credited service or accrued at least ten years of credited
service prior to experiencing a break in service are
entitled to health coverage upon retirement which is
partially funded by the State or county as provided in
section 87A-35, HRS.
Based upon an opinion rendered by the Department of
the Attorney General reflecting disapproval of the
ramifications of the provisions of this measure, your
Committee on Conference has amended this measure by:
(1) Deleting the language which required the State
or counties to pay the full base monthly
contribution amount for health benefits plans
for an employee hired prior to July 1, 1996,
who has had a break in service and who
cumulatively accrues at least ten years of
credited service. . . .
Conf. Stand. Comm. Rep. No. 119-04, in 2004 House Journal, at
2055 (emphases added). The legislative history set forth above
reflects a clear intent to ultimately exclude employees with a
break-in-service from the Tier 1 100% employer contribution
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FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
benefit. We thus conclude that HRS § 87A-36, providing partial
employer contribution, applies to this case based on Slaton's
2006 date of hire; and the Circuit Court's MPSJ Orders granting
the State's MPSJ and denying Appellants' MPSJ, were correct.
See Dannenberg, 139 Hawai‘i at 49, 383 P.3d at 1187.
IV. CONCLUSION
For these reasons, we affirm the Circuit Court of the
First Circuit's (1) June 25, 2020 "Final Judgment on Count I
(Declaratory Relief)"; (2) May 21, 2020 "Order Granting
Defendants' Motion for Partial Summary Judgment on Count I
(Declaratory Relief) filed December 9, 2019"; and (3) May 21,
2020 "Order Denying Plaintiffs' Motion for Partial Summary
Judgment on Count I (Declaratory Relief) filed March 1, 2019."
On the briefs: /s/ Keith K. Hiraoka
Presiding Judge
Randolph R. Slaton,
for Plaintiffs-Appellants. /s/ Clyde J. Wadsworth
Associate Judge
Weiwei He,
for Defendants-Appellees. /s/ Karen T. Nakasone
Associate Judge
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