Over $40 million in remaining defined benefit plan employee contributions would be disbursed soon after the House of Representatives gave its final nod yesterday, even as retirees would start seeing a 25-percent cut in their pension checks on Oct. 15. At least 12 of 16 individuals who opted out of the NMI Retirement Fund settlement class are not expected to get any pension check in the mail next week.
This is the happy and sad reality for different groups of people who have been a part of the CNMI’s pension agency whose assets are being transferred to a settlement trust.
“The administration is saying there’s no guaranteed pension for retirees who opted out but I have yet to test the system on Oct. 15, whether I’d get a pension check or not. I rely mainly on my pension, which is enough to put food on the table and buy medicine,” retiree Jess Taisague, 56, told Saipan Tribune yesterday.
Taisague is one of the 13 retirees who joined three other active members in opting out of the settlement class.
“I worked in government for 23 years, hoping that I would get my retirement pension for as long as I can and get the constitutional protection we’re entitled to. I think the government screwed up and somebody should be held accountable,” he said.
Taisague said he will take the government to court if his “constitutionally guaranteed protection” is not enforced.
“I will take that route,” he said.
Of the 16 who opted out, three are active members and 13 are retirees. Of the 13 retirees who opted out, one of them is Rep. Ray Tebuteb (Ind-Saipan), who chose to receive his salary as an elected official rather than draw his pension. So come Oct. 15, Tebuteb would at least still have his salary as a lawmaker.
“But I am continuing to contribute to the defined benefit plan that does not benefit me,” Tebuteb said.
Press secretary Angel Demapan said yesterday that the 25-percent cut took effect on Oct. 1 and this will be reflected in the Oct. 15 pension check.
“The administration understands that this is a challenge for many, but at least they are assured of a steady flow of income by way of the settlement agreement. The administration will continue its efforts to work with the Legislature to identify resources that can eventually be used to restore or make whole the retirees’ pensions,” Demapan told Saipan Tribune.
Because some individuals chose not to be members of the settlement class, “they will need a separate legislative appropriation to fund their pension.”
“Right now, there is none,” he said.
There are pending bills that seek to fund the opt-out retirees’ pension, but they are still under legislative committee reviews.
“It might be too late for the Oct. 15 release of checks even if these bills pass the House and Senate next week. But, like I said before, the government is still responsible for everyone, opt-outs or not,” Tebuteb said.
The settlement agreement in the Betty Johnson case against the Fund and the CNMI government guarantees at least 75 percent of retirees’ regular pension. The other 25 percent would be the obligation of the government.
The Inos administration and the Legislature have been working on legislation that would help generate new and additional revenues, so that it can restore the 25-percent pension cut and comply with the requirements of the settlement class.
Gov. Eloy S. Inos recently signed the revenue-generating video lottery bill and the Legislature is expected to pass an electronic gaming bill in the weeks ahead.
“The administration will keep pushing for revenue-generating bills. Until we realize actual revenues being generated, much work remains to be done,” the press secretary said.
Meanwhile, Fund members who chose to terminate their DB membership without losing their government employment will soon receive the remainder of their DB employee contributions, totaling some $42 million.
House Speaker Joseph Deleon Guerrero (Ind-Saipan) said this has the potential of boosting the CNMI economy.
This, after the House adopted yesterday a House joint resolution acknowledging and approving the settlement agreement in Johnson vs. Inos as required for the final disbursement of employee contributions under Sections 12.0 and 34.0 of the settlement agreement.
These disbursements of employee contributions are pursuant to Public Laws 17-82 and 18-2.
HJR 18-10, House Draft 1, Senate Substitute 1 passed the House at 3:01pm yesterday by a vote of 14-1 with three voting “present” and two absent.
Rep. Janet Maratita (Ind-Saipan) was the only one who voted “no” to the resolution—like the first time—claiming that the settlement agreement is unconstitutional.
“Two wrongs don’t make a right. I say it again, the settlement agreement violates the NMI Constitution,” Maratita said.
The three who voted “present” were Tebuteb, Rep. Roman Benavente (Ind-Saipan), and Rep. Lorenzo Leon Guerrero (Ind-Saipan).
The speaker, in an interview, said the House leadership, during its meeting on Tuesday, agreed to support the Senate-substitute version of House Joint Resolution 18-10 since the Senate version “does not change the intent of the resolution” as a whole.
The House leadership met with assistant attorneys general Teresita Sablan and Reena Patel on Tuesday on the matter.
The adoption of this resolution is the last hurdle before members get the remainder of their DB employee contributions.
Demapan said the checks will be disbursed soon.
“A soon as the Fund finishes calculating contributions made in fiscal years 2012 and 2013, they should be ready to roll out disbursements,” he said.
During the preliminary approval of the settlement deal, some $10 million was disbursed. The remainder, or $42 million, of DB contributions from the Fund will be released after final approval of the settlement agreement and then after legislative approval.