More and more active members of the NMI Retirement Fund are withdrawing their contributions from the pension system with so far a total of 813 refund applications received by the agency at the end of business hours yesterday.
Yesterday was the second day active members are allowed to file applications to withdraw their contributions.
The 813 refund applications as of yesterday already reflects 27 percent of the entire active members' count which is about 3,000.
It was on Monday when the Fund opened the submission of refund applications of members following the enactment of Public Law 17-82, or the CNMI Pension Reform Act of 2012, which authorizes members to take back all their contributions with interest from the program and can elect to terminate their membership to the system.
Last Sept. 14, the Fund released a memorandum to members explaining how the process will be handled by the agency.
Members were informed that if they have outstanding member home loan or if they are currently paying for prior service credit or making payments toward underpaid employee contributions, their refund application will be marked as “special processing” and may take slightly longer to process than members who have no outstanding obligations.
“For the purpose of fairness to all members, elections to terminate and receive a refund will be processed strictly in the order received [with the exception of the special processing]. No consideration can be given for hardships such as death in the family, medical needs, loss of electrical power, foreclosure on primary residence, moving off island or any other personal circumstances,” the Fund memorandum stated, adding that there is no need for members to write or phone for follow-ups.
The Fund also said that it will treat each request for a refund as an urgent need and process as expeditiously as possible. Each election will be numerically stamped upon receipt and refunds will be processed in batches-like several hundred each Friday.
The Fund pointed out that if a member takes no action, or did not apply for refund, employee contributions will continue to be deducted from their paycheck and remitted to the Fund. This will continue to earn interest at the prevailing savings rate at each fiscal year end.
For those inactive members with over 15 years of service, the refund process is 25 percent within 30 days of approval and the balance is within 90 days thereafter.
For inactive members with less than 15 years of service, the Fund's regular refund of contribution process will be applied, which is 100 percent contributions within 90 days after the submission.
Meantime, the Fund indicated that if a DC plan member wants to terminate contributions to the DC plan, they have to inquire with the ASC Trust if they believe they are qualified.
“If you do not terminate your employee contributions to the DC plan and your employer will continue to make the 4 percent employer contribution to your account, you will continue to obtain vesting, until you reach five years of service, at which time you will be 100 percent vested in the employer contributions,” the Fund's memorandum stated.