The Kamehameha Schools
Retirement Plan




Sightings from The Catbird Seat

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October 28, 2009

TO:               Kamehameha Schools Retirees/Beneficiaries/Term Vesteds

FROM:          Deri M. Arakaki, Benefits & Retirement Partner

SUBJECT:    SUMMARY ANNUAL REPORT (SAR) & ANNUAL FUNDING NOTICE (AFN)

As a retired, beneficiary, or term vested participant in Kamehameha School’s Retirement Plan, the attached reports are being sent to you.

The Employee Retirement Income Security Act of 1974 (ERISA) required employers to file an “Annual Return/Report” with the Internal Revenue Service. It also requires us to provide a summary of the report to all plan participants....

Should you have any questions, please call Human Resources at (808) 534-8066 or (808) 534-8078....

Funding & Investment Policies

The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits....

Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan’s investment policy. Generally speaking, an investment policy is a written statement that provided the fiduciaries that are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions....

Benefit Payments Guaranteed by the PGGC

If a single-employer pension plan terminates without enough money to pay all benefits, the PBGC will take over the plan and pay pension benefits through its insurance program. Most participants and beneficiaries receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits that are not guaranteed...

Where to Get More Information

For more information about this notice, you may contact Deri Arakaki at Kamehameha Schools, 567 South King St., Suite 105, Honolulu, HI, 96813, 1-808-534-8066. For identification purposes, the official plan number is 002 and the plan sponsor’s employer identification number or “EIN” is 99-0073480. For more information about the PBGC and benefit guarantees, to to PBGC’s website, www.pbgc.gov, or call PBGC toll-free at 1-800-400-7242 ...


 

May 16, 2007

Deferred money to ex-trustees
'pretty big'

By Rick Daysog, Advertiser Staff Writer

Newly released filings with the Internal Revenue Service show former Kamehameha Schools trustee Henry Peters received $428,835 in deferred pay last year.

The filings, which cover the year ending June 30, 2006, also show that former trustees Matsuo Takabuki earned $270,135 in deferred compensation last year, while former state Supreme Court Chief Justice William Richardson received $47,696.

The filings for the first time give details about the compensation for former board members of the $7 billion charitable trust.

A deferred compensation plan is a tax-savings strategy that allows an executive to postpone the payment of part of his or her annual compensation until a later date, when the executive is in a lower tax bracket.

Kamehameha Schools offered a deferred compensation plan for key employees and trustees from the mid-1970s until the early 1990s. 

Contacted at home yesterday, Peters said his deferred compensation is part of a retirement plan that he set up to provide for his family.

Peters said his past trustee pay was performance-based and was determined under a state law that at the time allowed trustees of charitable organizations to receive up to 2 percent of the organization's annual income.

He added that many of the estate's court-appointed masters have found the compensation was appropriate in their annual reviews of the estate's finances.

"We didn't have any retirement, a health plan or any other kind of those amenities. We just have those commissions and from those commissions, it was our responsibility to provide for our own future," Peters said. "Our compensation was performance-based. It was based on results."

Takabuki, who retired in 1993, and Richardson, who retired as trustee in 1992, could not be reached for immediate comment. When these three served as trustees, the charity was known as Bishop Estate.

APPROACHES CEO'S PAY

Peters' deferred compensation is about four times the amount paid to each of the current Kamehameha Schools trustees last year. It's also about three-quarters of the $574,230 that the charitable trust's Chief Executive Officer Dee Jay Mailer earned in 2006.

"That is a pretty big number," said Linda Lampkin, research director at ERI Economic Research Institute in Washington, D.C., and an executive pay expert specializing in the nonprofit sector.

Peters received the money from an individual deferred compensation plan he set up with trustee pay that he received in the 1980s and 1990s.

Before his resignation in 1999, Peters earned as much as $1 million a year as a trustee.

Peters, 66, is a former state House speaker. He served as a Kamehameha Schools trustee from 1984 until 1999 when he resigned along with fellow trustees Richard "Dickie" Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

The resignations came after the Internal Revenue Service threatened to revoke the charitable trust's tax-exempt status.

Kamehameha Schools spokeswoman Ann Botticelli had no comment on Peters' deferred pay.

COMPENSATION SLAMMED

When he resigned from the trust, Peters' deferred pay was criticized by the state attorney general's office. The AG's office — which had been seeking multi-million dollar fines against Peters and his fellow trustees — argued that Peters' deferred compensation was based on excessive pay that he received while he was trustee.

Deputy Attorney General Hugh Jones would not comment yesterday.

The estate's tax filings also show that Mailer's 2006 pay of $574,230 was up nearly $100,000, or about 21 percent, from her 2005 compensation of $474,240.

But even with the pay hike, Mailer was the estate's second-highest paid executive behind the trust's vice president of endowment, Kirk Belsby, who received $663,724 in total compensation last year.

Both Mailer and Belsby earned less than the $2.6 million average pay that the CEOs of Hawai'i's largest publicly traded companies received last year. But the salaries of the trust executives were in the general range of what top executives of the nation's largest nonprofits receive.

Lampkin, the Washington, D.C., executive pay expert, said the average annual compensation for top executives of charitable foundations with assets of $100 million or more was about $637,000 last year.

For large nonprofits including hospitals and universities with assets of $1 billion to $10 billion, the pay ranges between $513,000 a year and $1 million a year, Lampkin said.

HOW MUCH OTHERS MADE

Kamehameha Schools' tax filing for its 2006 fiscal year also listed the pay for several of its top executives, including:

Christopher Pating, vice president of strategic planning, who earned $461,415 last year;

Elizabeth Hokada, director of financial assets, who received $316,953;

Michael Loo, vice president of finance and administration, who was paid $299,630;

Vice President of Legal Services Colleen Wong, who earned $248,285;

Michael Chun, headmaster of Kamehameha Schools' Kapalama campus, who received $230,035;

Former state Budget Director Yukio Takemoto, who recently retired as the estate's director of facilities development, received $208,471 last year.

Founded by the 1884 will of Princess Bernice Pauahi Bishop, the Kamehameha Schools is a tax-exempt organization that educates children of Hawaiian ancestry. The estate is one of the nation's largest charities and is Hawai'i's largest private landowner with 365,000 acres.

EDUCATION SPENDING UP

The estate's 2006 tax filings also showed that the estate increased spending for its educational programs to 220 million, which included $197 million on campus and outreach programs.

Those expenditures included $11 million in financial aid for preschool to 12th-grade students, and another $12.7 million in post-high school financial aid.

The trust also spent $4.4 million in legal fees last year, with much of that going to defend its Hawaiians-first admission policy.

The trust announced Monday that it had settled a lawsuit that challenged its century-old Hawaiians-first admissions policy just as the U.S. Supreme Court was about to decide whether to take the case.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.


 

November 8, 2004

Pensions seek consultant disclosure

By Yamil Berard, Star-Telegram Staff Writer

Jack Silver was a teacher at an inner-city Chicago school hobnobbing with the managers of multibillion-dollar funds.

In fact, investment managers were paying $50,000 to "meet people like me," said Silver. "Now, that's a hell of a lot of money."

Why Silver? Because he was on the pension board for teachers in Chicago. Its consultant put on the seminars, raking in the admission fee from managers who might be seeking a piece of the fund's $10 billion investment pie.

That made Silver wonder: Did attending the seminars help managers win the consultant's recommendation? And was the consultant doing other business with managers It hyped to the pension board?

Those are questions that some public pension officials have begun asking since a handful of pension funds around the country have made discoveries that left them queasy.

They found that the consultant who guided their every move -- telling them how to divvy up investment dollars which investment managers to hire and fire, and whether the fund was getting socked with excessive trading charges'-- was making money from both sides of the table.

Now there's a growing clamor for public pension plans to demand that consultants put their cards on the table and disclose financial incentives. Some Texas plans have taken steps to require disclosure, the Star-Telegram found in a survey of more than a dozen plans.

But others still have not, despite what some critics see as the potential for conflicts of interest. Their concerns:

Some consultants recommend investment managers that are a branch of their own company. In California, a Santa Clara Valley pension board fired investment manager Putnam in February after the indictment of two people for securities fraud. Putnam and the plan's consultant, Mercer Investment Consulting, are both part of Marsh & McLennan Cos. The New York attorney general's office is examining whether Marsh rigged insurance bids, and whether Mercer steered clients to Marsh insurance products....

Continued at... “The Great Nest Egg Robberies


 

According to Kamehameha Schools’ Annual Return/Report of Employee Benefit Plan (Form 5500) for the year 2000:

        The Employer’s ID Number (EIN) is 99-0073480

        The Plan Number (PN) is 002

        The Plan was adopted effective January 1, 1972

        Approximate number of participants at end of year: 1,656

        Participants include employees of Kamehameha Schools, Pauahi Management Corporation and Kamehameha Investment Corporation (wholly owned subsidiaries of Bishop Holdings Corporation, which is a subsidiary of Kamehameha Activities Association, a controlled support organization of the Schools) and Kukui, Inc. (a wholly owned subsidiary of Pauahi Management Corporation) (together with the Schools, “Participating Employers”).

-         The current value of the assets at the beginning of the year were $130,379,025; the total assets at the end of the year were $118,339,357.

        The net investment loss from common/collective trusts was $809,235.

        The net investment loss from pooled separate accounts was $7,358,998.

        The Plan is administered by the Retirement Plan Committee which is appointed by the Schools’ Board of Trustees (Board) and is responsible for management and administration of the Plan. In accordance with the Plan document, effective March 12, 1996, the plan administrator shall be the Schools and the chairperson of the Committee shall be appointed by the Board.

        The Custodians of the plan are the Prudential Insurance Company and First Hawaiian Bank (which is now owned by a French company).

        The Independent Auditor was KPMG LLP

The insurance broker for Kamehameha Schools’ Retirement Plan was Aon.

On November 20, 1996, Bobby Harmon, the Risk, Insurance & Safety Manager for Kamehameha Schools/Bishop Estate, and the non-salaried President of P&C Insurance Company, Inc., a subsidiary of Pauahi Holdings, Inc., was terminated from both positions. In the year 2000, Harmon began to question (in what attorneys for Kamehameha Schools have dubbed “his letter-writing campaign”) the propriety of the management of the investments in the Plan.

Copies of some of his letters and related materials are posted here solely for the information of Kamehameha Plan Participants and curious catbirds:

www.kycbs.net/Claim-IRS-W2-Katz-7-25-8.htm

http://starbulletin.com/2000/02/11/news/story1.html

www.kycbs.net/KSpension.htm

www.kycbs.net/AAA-KS_USDOL-8-5-0.htm

www.kycbs.net/AAA-KSBE-IRS-2-24-1.htm

www.kycbs.net/Guttman-4-18-1.htm

www.kycbs.net/GuttmanComplaint-7-30-1.htm

www.kycbs.net/AAA-Guttman-IRS-W2-3-28-2.htm

www.kycbs.net/Claim-Tamm-3-30-2.htm

www.kycbs.net/AAA-KSpens-4-9-2.htm

www.kycbs.net/KSpens4-10-2.htm

www.kycbs.net/KSpens6-20-2.htm

www.kycbs.net/KSpens7-11-2.htm

www.kycbs.net/KSpens11-25-2.htm

www.kycbs.net/Claim-Katz-1-8-3.htm

www.kycbs.net/Claim-Guttman-IRS-1-21-3.htm

www.kycbs.net/Harmon-Trustees.htm

www.kycbs.net/AAA-9-24-3.htm

www.kycbs.net/KSpens12-17-3.htm

www.kycbs.net/AAA-HarmonMotionDismiss.htm

www.kycbs.net/AAA-HarmonAnswer-6-14-4.htm

www.kycbs.net/Claim-MarrHipp-8-9-4.htm

www.kycbs.net/Claim-Guttman-8-10-4.htm

www.kycbs.net/Claim-Guttman-8-13-4.htm

www.kycbs.net/KSpens11-10-4.htm

www.kycbs.net/Claim-Guttman-1-27-5.htm

www.kycbs.net/Claim-Guttman-1-31-5.htm

www.kycbs.net/Claim-KS-2-7-5.htm

www.kycbs.net/Claim-Tius-2-11-5.htm

www.kycbs.net/Claim-KS-3-1-5.htm

www.kycbs.net/Claims-Branch-AAA.htm

www.kycbs.net/Claims-Branch-AttorneyGeneral.htm

www.kycbs.net/Claims-Branch-Ayabe-Chong.htm

www.kycbs.net/Claims-Branch-DOL.htm

www.kycbs.net/Claims-Branch-DOJ.htm

www.kycbs.net/Claims-Branch-Dunn-Tamm.htm

www.kycbs.net/Claims-Branch-IRS.htm

www.kycbs.net/Claims-Branch-Kessner-Duca.htm

www.kycbs.net/Claims-Branch-Marr-Hipp.htm

www.kycbs.net/Claims-Branch-Mary-Lou-Woo.htm

www.kycbs.net/Claims-Branch-P-C.htm

www.kycbs.net/Claims-Branch-Prudential.htm

www.kycbs.net/Claims-Branch-Torkildson-Katz.htm

www.kycbs.net/CV05-00030-Complaints.htm

www.kycbs.net/CV05-00030-Witness-Chang-Kevin.htm

www.kycbs.net/CV05-00030-Witness-Clarke-Edwina.htm

www.kycbs.net/CV05-00030-Witness-Graulty-Rey.htm

www.kycbs.net/CV05-00030-Witness-Hipp-Kenneth.htm

www.kycbs.net/CV05-00030-Witness-Inouye-Maryanne.htm

www.kycbs.net/CV05-00030-Witness-Kam-Louanne.htm

www.kycbs.net/CV05-00030-Witness-Kurren-Barry.htm

www.kycbs.net/CV05-00030-Witness-Kurren-Faye.htm

www.kycbs.net/CV05-00030-Witness-McCubbin.htm

www.kycbs.net/CV05-00030-Witness-Park-Rodney.htm

www.kycbs.net/CV05-00030-Witness-Savio-Peter.htm

www.kycbs.net/CV05-00030-Witness-Takemoto-Yukio.htm

www.kycbs.net/CV05-00030-Witness-Wong-Colleen.htm

#


 

 

Please take time to visit the Kamehameha Schools website at...

www.ksbe.edu/

~ ~ ~

For more of the story on ...

DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE

Part I - Part II - Part III - Part IV - Part V - Part VI - Part VII

OFFICE OF THE UNITED STATES TRUSTEE VS HARMON

BROKEN TRUST: GREED, MISMANAGEMENT & POLITICAL MANIPULATION

 


 

 

AND, FOR MORE BUZZARDS OF A FEATHER, GO TO...

A CONNECTICUT YANKEE IN KING KAMEHAMEHA’S COURT

AIG: THE AMERICAN IDOL OF GREED!

ALLIED WORLD ASSURANCE

ALOHA AIRLINES: FLYING WITH THE BANKRUPTCY BUZZARDS

ALOHA, HARKEN ENERGY

AMERICAN SAVINGS BANK: BEHIND THE BLINDS

THE POOP ON AON

APOLLO ADVISORS

ARBITRATE THIS!

AXA

THE BANKRUPTCY BUZZARDS

BCCI

BIRDS IN THE LOBBY

BLACKSTONE GROUP

BROKEN TRUSTS

BROKEN TRUST: THE BOOK

BUZZARDS IN THE BANK OF HAWAII

THE BUZZARDS IN THE HALLS OF JUSTICE

BUZZARDS OF PARADISE

LOST GENERATIONS: A BOY, A SCHOOL, A PRINCESS

CESSPOOL

THE CHUBB GROUP

CITIGROUP: VAMPIRES IN THE CITY

CLAIMS BY HARMON

CONFESSIONS OF A WHISTLEBLOWER

THE HARMON CHRONICLES

A CONNECTICUT YANKEE IN KING KAMEHAMEHA’S COURT

THE CROSSROADS GROUP

DIRTY GOLD IN GOLDMAN SACHS

DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE

FIRST HAWAIIAN BANK

THE FREEDOM TO SING

THE GREAT NEST EGG ROBBERIES

HAWAIIAN AIR LINES

THE HARMON ARBITRATION

HOW TO PLUCK A NON-PROFIT

I SING THE HAWAIIAN ELECTRIC

INVESTIGATING INVESCO

INVESTIGATING INVESTCORP

THE KISSINGER OF DEATH!

MARSH & McLENNAN: THE MARSH BIRDS

MARSH & McLENNAN’S MERCER CONSULTING

MARSH & McLENNAN’S PUTNAM INVESTMENTS

MARSH & McLENNAN’S TRIDENT FUNDS

OF VAMPIRES & DAISIES

PRUDENTIAL: A NEST ON SHAKY GROUND

PARADISE PAVED

P-S-S-T, WANNA BUY A GOOD AUDIT?

THE PIRATES OF PUNALUU

THE PUNA CONNECTION

RICO IN PARADISE

THE RISE & FALL OF SUMMIT COMMUNICATIONS

THE ROYAL SUN-ALLIANCE

THE SILENCE OF THE WHISTLE-BLOWERS

SUKAMTO SIA: THE INDONESIAN CONNECTION

TRACKING THE HAWAIIAN INSURANCE COMPANIES

TRACKING TREX

UNCLE SAM’S WEAPONS OF MASS DESTRUCTION

UNCLE SAM’S TORTURE CHAMBERS

VULTURES IN THE NATURE CONSERVANCY

VULTURES IN THE HAWAII NATURE CONSERVANCY

VULTURES IN THE SANDWICH ISLES

WHAT PRICE WATERHOUSE?

YAKUZA DOODLE DANDIES!

ZEPHYR INSURANCE

ZEROING IN ON ZURICH FINANCIAL SERVICES

 


 

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Originally posted November 9, 2003

Last updated November 4, 2009, by The Catbird

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CHRONOLOGY

November 9, 2003: Originally posted on www.the-catbird-seat.net

March 13, 2007: Judge David Ezra signs Order to shut down website

November 4, 2009: Latest update on www.kycbs.net

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