No checks and direct deposits—totaling over $40 million—will be released today to defined benefit plan members, touching off another round of finger-pointing that blames the NMI Retirement Fund, the Legislature, the federal court, plaintiff Betty Johnson, or the Inos administration for the delay.
At issue is a lack of “notification” from the court that says “legislative action” under the settlement agreement had been met, the Fund and some lawmakers separately said.
Senate floor leader Ray Yumul (Ind-Saipan) said the Legislature has already done its part by adopting a joint resolution acknowledging and approving the settlement deal as required for the final disbursement of employee contributions.
“The way that the Retirement Fund made their statement is that they have not received official notification. They didn’t say legislative notification through resolution. It means official notification from the court,” Yumul told Saipan Tribune.
Yumul was the main proponent of a Senate substitute version of House joint Resolution 18-10 House Draft 1, Senate Substitute 1.
“It’s in the hands of the federal court,” Yumul added.
The House adopted the Senate substitute, and a copy was officially transmitted to parties last week.
As of last night, the Fund had yet to be notified by the court that such legislative action has been met.
Affected DB members and their families were not amused.
“Politics should not play a part here; people’s livelihood is at stake. I hope the culprits won’t be in office again,” one of them said last night.
Provision in question
House Speaker Joseph Deleon Guerrero (Ind-Saipan) separately said that based on his communication with the Office of the Attorney General, plaintiff Johnson and her attorneys have concerns about a “be it further resolved” clause in the adopted resolution.
The speaker was referring to assistant attorneys general Reena Patel and Teresita Sablan, whom the House also consulted before acting on the Senate substitute resolution.
The specific clause in question states that the “Legislature preserves its sovereign rights under the Constitution and laws of the CNMI and the United States in approving parts of this Settlement Agreement in order to challenge the said Agreement in a court of law declaring any or parts of the Agreement invalid pursuant to Section 36.0 of the Agreement due to the said Agreement’s coerciveness and the Agreement’s attempt to extort the constitutional authority of the Legislature.”
“The plaintiff’s counsels feel that this provision kind of contradicts the resolution’s intention to approve the settlement agreement,” Deleon Guerrero told reporters.
Deleon Guerrero said the House leadership asked the OAG to send the House an official communication stating specific concerns about the adopted resolution.
Once this is done, the House stands ready to amend the resolution so as not to further delay the disbursements.
The speaker, however, pointed out that he does not agree with the plaintiff on this.
“A resolution has no force and effect of law, so it doesn’t change the settlement agreement that has been signed and agreed to by both parties. So this clause doesn’t change what has been agreed to,” he said.
Even if the Legislature takes this provision out, it doesn’t change “our position that the Legislature still preserves its rights under our laws and constitution,” Deleon Guerrero said.
“But because this could drag on and go back into court and it could delay the issuance of the second batch, the remaining withdrawals, we may need to either do an amendment to the resolution to strike out this provision or introduce a new resolution absent this language just to kind of expedite the release of the funds,” he said.
As of press time, the Legislature had yet to confirm whether it has received formal communication from the OAG or the administration.
Nevertheless, the speaker said the House stands ready to hold a session to amend the resolution or adopt a new one.
Yumul shares the same concern about a lack of an official communication either from the OAG, the plaintiff’s lawyers, or the court that there is an issue about the resolution.
As of 2pm yesterday, the Fund said it had not received notification that House Joint Resolution 18-10, HD1, SS1 conforms with the requirement of “legislative action” under the settlement agreement, which the federal court approved and is part of a court order.
“The Fund will not—indeed, cannot—release Disbursements until it receives notice that there has been ‘legislative action that conforms with the Settlement Agreement,” the Fund said in a statement at 4:20pm yesterday.
Accordingly, the Fund did not upload direct deposit payments and is not going to be distributing checks as planned.
Disbursements would have started today. This means millions of dollars would have started circulating in the economy within days.
The Fund pointed out that it stands ready to release all disbursements via checks and direct deposits, pursuant to Public Laws 17-82 and 18-2.
“The Fund, however, cannot release the disbursements unless and until it receives notification that the settlement agreement’s requirement of ‘legislative action’ is met. In other words, without such notification, releasing the disbursements violates a court order,” it added.
The Fund said when it is able to release the disbursements, everyone will be informed through the media and the Fund’s website.
Moreover, the pension agency reminded PLs 17-82 and 18-2 applicants that have not submitted their waiver to visit the Fund website and execute a waiver so that the Fund will be able to process their disbursement.
On Friday, the Fund announced that barring unforeseen circumstances, it plans to upload direct deposit payments yesterday and applicants can expect their employee contribution withdrawals to be credited to their bank accounts within 24 to 48 hours after upload.
This means by today or tomorrow, their bank accounts would have the remainder of their refunded contributions pursuant to PLs 17-82 and 18-2.
The Fund also initially planned to distribute checks to all applicants today and tomorrow on Saipan, Tinian, and Rota.
This week’s disbursement would have come much earlier than initially expected, which is the first week of November.
During the settlement deal’s preliminary approval, 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.