Saipan Tribune

Thursday, June 20, 2013

Thursday, September 06, 2012

Fund sees passage of reform bill, modifies refund form application

The NMI Retirement Fund is anticipating that the pension reform bill at the Legislature will soon be enacted into law. In preparation for its passage, the agency is now modifying the refund application form to align it with the legislation.

Acting Fund administrator Esther Ada told Saipan Tribune yesterday that the pension reform bill, House Bill 17-315, has already been transmitted to the House after the Senate passed it last week.

If HB 17-315 becomes law, it will offer active members the option of whether to get a refund on their contributions without penalty, continue working, transition into the U.S. Social Security system, or remain with the Fund.

The same legislation also allows active members to refund 25 percent of their contributions within 30 days while the remaining 75 percent will be disbursed within 90 days after.

“In anticipation of the bill becoming law, the Fund is currently modifying its refund application form to conform to the intent of the bill and is awaiting its passage from both [chambers] before finalizing it and making it available to active employees,” Ada said.

Because of the uncertainties surrounding the pension program, many active members have signified their plan to withdraw their contributions. Among these government employees are the personnel of the Commonwealth Health Center who are also hoping for the passage of the legislation.

“Many of us here in the hospital are hopeful on that bill. As soon as it becomes law, I am sure many of us will get back our contributions. With the ongoing uncertainties at the pension program, that's the better way to protect our investment for many years,” a long-time hospital said yesterday.

Saipan Tribune learned that the Retirement Fund expects an influx of refund applicants once the bill is enacted and has already set aside $113 million for this purpose.

Prior to leaving his post on July 30, former Fund administrator Richard Villagomez disclosed to Saipan Tribune that refund applications received by the agency from October 2011 to April 2012 totaled 144, with refunds amounting to a total of $2.4 million. This figure is expected to dramatically increase after the passage of the reform bill.

The agency temporarily stopped issuing refunds due to the then bankruptcy case that was eventually dismissed.