In their desire to prolong the life and eventually save the NMI Retirement Fund, a number of retirees are willing to make sacrifices-even allowing their pensions and benefits to be taxed if that's the only way they can protect their contributions to the program.
This according to Commonwealth Retirees Association chair Larry Cabrera, who disclosed to Saipan Tribune that this position was already taken by the group's membership in a previous meeting.
The pension obligation bond, which failed in the past election, was proposed to give the administration a means to pay its obligation to the Fund. This obligation amounts to $320 million to date and still growing, representing unpaid employer contributions for many years.
Cabrera believes that the government has no other way to pay its debt to the Fund other than floating a bond. To backup this plan, he said a dedicated tax from pensions and benefits of retirees can make the idea attractive. A special account under the Fund was also recommended to be established solely for these taxes.
The chairman revealed to Saipan Tribune that even if current retirees' benefits are taxed by 10 percent, retirees' take home pay will probably still be bigger-by almost 200 percent-than what they could get from Social Security Administration.
Cabrera, along with other members, are not convinced with the administration's plan to transfer active Fund members to SSA, in order to get rid off the defined benefit plan. At present, there are an estimated 3,000 retirees and 3,000 active members in the pension program which is predicted to last less than two years.
“This problem is almost 30 years old and it seems nobody wants to fix it. Although the retirement program is a noble idea for the citizens, we have a government that is not really interested in keeping it to allow its citizens to continue to live the remaining years of their lives comfortably,” said Cabrera, adding that this is why the government wants to “hitch-hike” to the federal SSA program.
The CRA members, in its meeting last week, rejected the governor's executive order that placed the Fund in a state of emergency and allows the transfer of its functions to the Department of Finance. They pleaded for the Legislature to junk the executive order to help the program survive.
Hiring own lawyer
Cabrera told Saipan Tribune that the CRA board of directors is looking at hiring its own lawyer who will truthfully represent the retirees' concerns.
“The board will discuss this idea in our next meeting and hopefully we will make a decision. We're considering all options available to us and brought to our table,” he said.
Cabrera said he endorsed the hiring of a CRA lawyer in relation to the group's plan to challenge the governor's executive order in court. However, Senate President Paul Manglona (Ind-Rota) asked that they postpone this decision pending action from the Legislature's.
The chairman admitted that he had initially spoken to some lawyer friends but failed to secure a commitment from anyone due to conflict of interest, busy schedules, and ultimately, working without due compensation.
“But we will still get somebody who is not hungry and believe on the things that we want to do,” he added.