Gov. Eloy S. Inos, through press secretary Angel Demapan, said yesterday that the administration “recognizes the constitutional issue” that Rep. Janet Maratita (Ind-Saipan) brought up, that is why retirees can choose to opt out of the NMI Retirement Fund settlement deal with its proposed 25-percent pension deferment.
If the settlement deal fails, the Fund’s future will remain uncertain until the issue is decided by further litigation.
This is in the event the number of Fund members who opt out of the class exceeds the full amount payable in fiscal year 2014.
“This is a critical time in our history, there’s simply no room for political posturing or bickering. At this point, the settlement is the best way to go,” Demapan told Saipan Tribune when asked about Maratita’s letter.
Demapan said, “Retirees can be certain that they will, at a minimum, have at least 75 percent of their benefits steadily paid to them while our leaders seek ways to increase this figure and ultimately, return to full restoration.”
The press secretary also said it is “frustrating for the governor as he has made every effort to apprise and work with the Legislature on concertedly addressing this and other challenges” of the CNMI.
“The governor is grateful for the support of other lawmakers in joining the administration in its efforts to ensure the government meets its end of the settlement agreement,” he said.
Inos has repeatedly told the public that the tentatively approved settlement agreement is “the best deal” that the CNMI can enter into given its financial constraints.
The governor earlier said the stakes are much higher if the settlement deal fails, including a consent judgment of $779 million.
Still, Maratita begs to differ.
Maratita told the governor in an Aug. 16 letter that in her view, the settlement deal is “unconstitutional, illegal, and a breach of fiduciary duty” to the CNMI people and the Fund members.
Other lawmakers continue to support the tentatively approved Fund settlement deal.
As of yesterday, a joint House-Senate resolution is being drafted to express the Legislature’s support to the settlement agreement.
‘Not urging them to opt out’
While she raised constitutional and other concerns about the settlement deal, Maratita said she is not encouraging Fund members to opt out of the settlement class.
“Each member can decide for themselves, what is right for them. I am not urging them to opt out,” the lawmaker said in a phone interview yesterday, adding, however, that she has met people who expressed willingness to opt out.
Demapan, meanwhile, said that Maratita’s letter has yet to reach the Office of the Governor as of close of business yesterday.
“Nonetheless, the administration reiterates that it recognizes the constitutional issue. That is why the settlement agreement provides for the plaintiffs’ attorneys to contact the retirees to explain the terms of the settlement and then ask each retiree whether they choose to opt-in with the proposed cut or not,” Demapan said.
Demapan echoed the governor’s statement that in the event that the number of members who opt out exceeds 10 percent of the full amount payable in fiscal year 2014, “then the settlement is void and the future of the Fund will hang uncertain until decided by further litigation.”
Maratita said her letter was sent to the governor’s office on Friday. She said when she met the governor at an event on Saturday, the governor didn’t mention her letter.
Maratita, in her letter, offered eight recommendations to the governor to ensure “fairness,” including exempting from the 25-percent cut those that receive $15,000 or less in annual pension.
Demapan reiterated that the governor has not received Maratita’s letter and thus is unaware of her proposals.
“However, what is known is that the governor, at this point, is more focused on working with the Legislature to infuse new revenues to help increase appropriations to the Fund. Every increase in funding to the Fund will be targeted toward restoring the benefit cuts proposed in the settlement,” the press secretary said.
Among Maratita’s recommendations is a corresponding 25 percent cut from the CNMI budget “so that everyone shares the burden and enjoys the benefits alike.”
The administration is not considering such proposed austerity.
“The governor, although a retiree himself, also remains cognizant of the plight of active employees, who already shared in the pain by having to work on a reduced 64-hour pay period for two years. Interestingly, when active employees were forced to work under reduced hours, Rep. Maratita did not call for retirees to ‘share the burden,’” Demapan said.
When asked whether her letter is some sort of “sour graping” after the governor picked another person to become Department of Community and Cultural Affairs over her, Maratita said this has nothing to do with that.
“As an elected official I have a fiduciary duty to uphold the Constitution,” Maratita said.
She hopes to receive a response letter from the governor.
The governor, according to Demapan, also believes that “at this point,” only Maratita among lawmakers is taking a different view.
Inos has been holding townhall meetings to make Fund members understand the settlement agreement and get their support. Inos has also been answering questions from the crowd at townhall meetings.
A townhall meeting is a rarity among CNMI governors.
Inos will hold a townhall meeting today on Rota, and on Tinian on Thursday.
The court has already tentatively approved the settlement deal, and any changes to such deal needs the agreement of all parties involved, not only the CNMI government.