Gov. Eloy S. Inos asked the Legislature late afternoon yesterday for a supplemental budget using $107,258 in available resources “not previously appropriated,” to pay for the pension of 16 retirees who opted out of a Retirement Fund settlement agreement.
The total needed, however, is over $227,000, and the administration and Legislature need to identify new sources to fund the balance through the end of fiscal year 2014.
The governor’s request came on the eve of today’s Senate action on a House-passed bill funding the opt-outs’ pension using lapsed funds from the government’s employer portion of the defined contribution plan.
It also comes days after one of those who opted out, Jess Taisague, sued the governor, the CNMI government, and the Fund for alleged violation of his constitutional rights.
As of last night, lawmakers said they had yet to see the governor’s actual letter requesting supplemental funding for the opt-outs.
The 16 who opted out the settlement agreement are not eligible to receive benefits from the settlement fund. They will need a separate appropriation of funds in order to be paid their semi-monthly pension.
Inos is proposing an appropriation of “available un-appropriated revenues for FY 2014” in order to help these opt-outs.
Estimated revenue for fiscal year 2014 is $123.4 million but total appropriation under Public Law 18-18—the FY 2014 budget law—is $123,692,742.
Inos said there’s $107,258 in total estimated resource not previously appropriated.
But the governor needs to identify revenues of over $102,000 to fund the retiree opt-outs’ pension.
The amount required to fully fund the pension excluding employer contribution for Group Health and Life Insurance is $248,114.73.
The required amount to be paid at 75 percent of pension is $186,086.07.
The employer contribution and Life Insurance is $41,342.40.
“Therefore, the total amount required is $227,428.47,” the governor told House Speaker Joseph Deleon Guerrero (Ind-Saipan) and acting Senate president Victor Hocog (R-Rota).
Inos said the proposed appropriation is sufficient to last only from Oct. 1, 2013, through March 15, 2015.
He said they still need to identify new revenues for appropriation to fund the balance through the end of fiscal year 2014, Sept. 30, 2014.
“Since these retirees did not receive any pension checks on Oct. 15, 2013, I urge the Legislature to act expeditiously on a supplemental appropriation bill described above. Needless to say, I am prepared to approve this bill upon reaching my office,” the governor added.
Meanwhile, the Senate will hold a 1:30pm session today and one of the bills on the agenda is House Bill 18-130, providing an appropriation to fund the retiree opt-outs’ pension using lapsed funds meant for employer contribution in the DC program.
There is no telling, as of yesterday, whether the Senate will move ahead with HB 18-130 as passed by the House on Friday, in light of the governor’s request for supplemental appropriation.
Retirees that remain members of the settlement class have started receiving a 25-percent cut in their pensions.