State Retiree Benefits Fact Sheet – Hawaii


Hawaii is one of several states that fell behind in funding its pension plans earlier in the decade, leaving it with a funding level of 65% as of 2006—below the 80% level most experts consider healthy. The funding level dropped precipitously between 2000 and 2006 largely because of the state’s practice early in the decade of diverting employer contributions to help balance the state budget. (Other factors in the drop were increased life expectancy of retirees and pay increases that were more than the state’s actuaries assumed.) The state contributed just 13% of what its own actuaries deemed necessary in 2000 and less than 5% in 2001. In recent years, however, Hawaii has instituted several important reforms and has done a good job paying the full annual required contribution. On the non-pension side, Hawaii will face some challenges in dealing with its retiree health care liability, which is high relative to the state’s size. The state had not set aside any money toward that bill as of the end of 2006.

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