Senators passed a House bill yesterday afternoon funding the pension of retirees who opted out of a global settlement deal and added Gov. Eloy S. Inos’ request for a supplemental appropriation using $107,258 for the opt-outs’ pension.
House Bill 18-130, Senate Draft 1 passed the Senate by a vote of 7-0 at 4:47pm.
Because of the Senate amendment, Rep. Tony Sablan’s (Ind-Saipan) bill has to go back to the House. Once the House approves the Senate-amended bill, the measure goes to the governor.
HB 18-130’s original intent is to use any lapsed funds from a 4 percent employer contribution to the defined contribution plan that the government no longer has to pay if DC members withdraw their funds.
Senators were poised to pass the bill in its original form but the governor’s letter to the Legislature on the eve of the Senate session prompted Senate floor leader Ray Yumul (Ind-Saipan) to introduce a floor amendment.
Yumul’s floor amendment adds the $107,258 that the governor said is available to fund the pension of opt-out retirees.
His amendment also appropriates “any other additional un-appropriated revenue that the governor identifies.”
The Senate adopted Yumul’s amendment at 4:43pm before voting on the main motion.
Sen. Jovita Taimanao (Ind-Rota) voted “yes with reservation,” after voicing concern that such an amendment with proposed appropriation may have to originate from the House. Taimanao pointed out, however, that she supports the bill’s intent.
The Senate session set for 1:30pm didn’t start until about 3:30pm, as acting Senate president Victor Hocog (R-Rota) held a closed-door meeting with senators on the pension funding bill, among other things.
Sen. Pete Reyes (Ind-Saipan), during the session, recognized the House bill’s author, Sablan, for finding a way to fund the pension of opt-out retirees.
“We need to take care of the opt-outs. They are also entitled to receive their pension,” Reyes said.
The governor said the total amount needed to fund the opt-out retirees’ pension is over $227,000, much more than the $107,258 so far identified to partly fund this obligation.
This means the administration and Legislature need to identify new sources to fund the balance through the end of fiscal year 2014.
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.
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.
The settlement class has over 4,000 members and only 16 opted out. The opt-out retirees did not get their pension on Oct. 15 while the retirees that remained members of the settlement class started getting a 25-percent cut on theirs that same day.
One of those who opted out, Jess Taisague, is now suing the government after he failed to receive his pension on Oct. 15.
Meanwhile, those who applied for refunds of their defined benefit plan employee contribution—totaling over $40 million—will start getting their refunds today.
“I will surely be at the Retirement Fund office early Wednesday morning to get my check,” one of those refund applicants said yesterday.