Acting NMI Retirement Fund administrator Lillian M. Pangelinan brought to Gov. Eloy S. Inos’ attention a “fatal” error to the tune of over $80 million in the fiscal year 2014 budget bill that is now before him for action. If this error is not corrected, the Fund will end up paying only a single full pension in fiscal year 2014, and that will only be on Oct. 15, 2013.
As of last night, it’s not known how the administration and the Legislature would address the error that the Fund pointed out in a Sept. 12 letter.
Pangelinan said the confusion in the Legislature may have been caused by the Office of Management and Budget submitting the governor’s budget proposal, which mistakenly provided that over $4.030 million was needed for the Fund’s operations budget.
That figure, however, is actually the Fund’s total revenue estimates, and the Fund’s actual total operations amount should be more than $84.765 million. This is a difference of more than $80 million.
“I respectfully request that you correct this significant—and fatal—error, or else the CNMI’s retiree population will be subjected to only one pension payment for [fiscal year] 2014,” Pangelinan told Inos.
The House and Senate passed a compromise version of the $123.4 million budget last week. The budget bill is now with the governor.
The Fund’s acting administrator said she brought this over-$80 million discrepancy to OMB’s attention on July 25.
A day later, OMB advised Senate Fiscal Affairs Committee chair Jovita Taimanao (Ind-Rota) and House Ways and Means Committee chair Tony Sablan (Ind-Saipan), and requested the correct amount of $84,765,485 be reflected under the Fund’s operations account.
Pangelinan said because this error impacts thousands of lives, she also requested the Senate Fiscal Affairs Committee chair about a correction to the budget bill.
A Senate version of the budget bill contained the correct amount.
However, the version ultimately passed both by the Senate and House reflects the incorrect amount, Pangelinan said.
The Fund pays out some $6 million in monthly pension benefits, or about $3 million every 15 days.
“If the budget bill passes in its current form, the Fund will only be able to pay a full pension on Oct. 15, 2013. Thereafter, no pension payments can be made for the rest of [fiscal year] 2014,” Pangelinan told Inos.
All annual appropriations, once signed into law, mandate the Fund to “expend only the lesser of funds actually generated, collected or received, or the amounts indicated above.”
The budget bill, if signed into law in its current form, will permit the Fund to pay only one pension payment for 2014.
“We hope that the budget bill, as passed by the Legislature, contains only an oversight and/or typographical error. As such, we request your assistance. Prior to you approving the bill, please correct the Fund’s operations budget to the proper amount of $84,765,485 and thereby ensure prompt payment of retirement benefits for all our members,” Pangelinan told the governor.