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Friday, April 18, 2014

'Suspension of refund checks a delaying tactic'

Saipan Mayor Donald Flores and municipality employees have questioned the integrity of court-appointed Fund trustee ad litem Joseph Razzano for suspending the disbursement of refund checks to members due to the delinquent contributions of the central government and public schools.

In a letter to Razzano, which was also filed with the federal court, Saipan municipal employees described the ad litem’s reasoning as enough cause for them to call his integrity into question.

Razzano issued two letters on Nov. 13 and Nov. 27 explaining to Fund members that he decided to suspend the disbursement of refund checks due to the significant arrears of the school system and the government in terms of employee and employer contributions.

“Your letters are completely snapped, if not, disconnected [to] your assertion that the central government was and is at fault for your decision to suspend disbursements of employee contributions. Both your letters are suspect of an attempted misrepresentation to mislead and purposefully delay reimbursements,” the employees told the ad litem, adding that they do not appreciate Razzano’s “almost apparent nonsensical strategy” to prolong withholding property that members lawfully own.

The Fund earlier disclosed that PSS owes the pension agency $1.4 million in employee contributions for fiscal year 2012.

Municipal employees claim that this amount is not that large to affect the disbursement of refund checks, which only requires releasing 25 percent of a member’s contributions in the first 30 days.

The employees cited a Fund report in March this year which states that employee contributions in fiscal year 2011 was at $8.080 million. Figures for 2012 are not yet available.

“Assuming revenue in FY 2012 from employee contributions remains constant from the preceding fiscal year, the total amount that you claimed PSS did not transfer to the NMIRF should come to approximately 17 percent. We must argue that 17 percent is not even near significant,” said the employees.

Assuming there are 250 PSS employees that the Fund earlier said are affecting the disbursements, the this only represents 14 percent of the total applications filed with the Fund, which is 1,765, they said.

“Your ’equal treatment’ makes PSS the mother of anchor to stall, if not drag to the depth all innocent and compliant employees and their employers who had paid their employee’ contributions to the Fund, all disbursements,” said the employees.

Last week, PSS paid $1.1 million in employee contributions of its employees for FY 2012. However, suspension of the disbursement is still in effect pending the guidance of the court.

According to the municipal employees, “while suspending disbursement of employee contributions is another way of delaying a process that has been authorized by law, the ad litem even took a step further to encourage the court to tolerate and condone the decision and action in violation of Public Law 17-82 [refund law].”

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