On behalf of the islands' public schools, the Board of Education has expressed its support for a pending bill that proposes to hasten the release of refunds of Retirement Fund members' contributions but cited some unclear provisions that need to be clarified.
House Bill 18-12, which recently passed the House, proposes to amend Public Law 17-82 (or the refund law) to clarify some provisions necessary to expedite the refunds and prevent any further frustration of the process.
BOE chair Herman T. Guerrero said that several of the points addressed in HB 18-12 are a concern for PSS.
For example, PSS was initially unclear as to when allotments to the Fund from the defined benefit plan members should cease. “With the clarified points under Section 203(a), it is now clear that PSS may cease allotments upon submission to NMIRF of a DB members' 'request to terminate,'” said Guerrero in his Feb. 26 letter to the Legislature.
According to Guerrero, clarifying this section now allows PSS to better respond to employees' questions as to when they can stop having paycheck deductions for both Social Security and NMIRF plan contributions when they have already submitted forms indicating their wish to terminate their plans.
Guerrero said the BOE remains concerned about the bill's Section 205, which he said needs further explanation.
“Here, it is unclear as to whether a DC member who is not separating from government employment is allowed to withdraw the funds. In addition, no timeframe was provided for DC members with respect to how long it will take the process a DC withdrawal request,” said Guerrero.
“HB 18-12 provides additional support and improvement to PL 17-82 and on the whole, PSS is in full support of this bill. However, PSS would like to see just a few more additions to HB 18-12 so that, once passed, no more changes to PL 17-82 will need to be made,” he added.
House Bill 18-12 seeks to amend Public Law 17-82 to expedite the refund of members' contributions and reset timelines. Among the key provisions of the bill is its clarification of when applicant members should be refunded their employee contributions, now within 30 days of “submission” rather than within 30 days of “approval” as stated in PL 17-82.
The bill also increases the percentage of the contribution that can be initially refunded-from the current 25 percent to 50 percent. Only about 125 of 1,700 applications received got 25 percent of their employee contributions.