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Wednesday, April 16, 2014

OAG: Tang’s calculation of employer contributions incorrect

Settlement Fund trustee Joyce CH. Tang’s calculations of employer contributions are incorrect and that she has not acted on the CNMI government’s repeated requests for regular monthly reports, according to the Office of the Attorney General.

In the CNMI government’s response to Tang’s Feb. 12 report, assistant attorney general Reena J. Patel objected to Tang’s alleged incorrect calculation of employer contributions as well as an unjustified proposed increase in wages and salaries.

Patel said that Tang states that the outstanding employer contributions due from the CNMI government for the pay period Oct. 4, 2013, to Jan. 11, 2014, is $419,120.19.

Patel said that Tang miscalculated the amount of employer contributions that would have been due in those periods.

Patel said the CNMI has made several employer contribution payments and that upon discovering any deficient amounts, the government promptly paid any and all past due sums.

The lawyer said the CNMI calculates the employer contributions for the remaining active defined benefit plan employees at about $20,000 to $26,000 per pay period.

She pointed out that there were eight pay periods in the first quarter.

“Therefore, the total amount of employer contributions payable by the CNMI government would be approximately $200,000,” Patel said.

Upon discovering the calculation error, Patel said, she emailed the Fund’s administrator and legal counsel regarding the discrepancy.

Several days later, she said, the trustee sent the government revised calculations of the employer contributions that are substantially similar to the government’s figures.

Unfortunately, Patel said, the Settlement Fund, despite having daily communications with Gov. Eloy Inos’ team, failed to raise the issue of the deficient employer contributions before the trustee filed her report on Feb. 11.

“Had the issue been communicated earlier, this matter would have been resolved several months earlier,” she said.

Patel said that on Feb. 14, the government remitted six checks to the Settlement Fund, one for each pay period.

“Therefore, as of the date of this filing, the CNMI government is fully current on its employer contribution payments,” she said.

In the proposed budget for fiscal year 2014, the trustee’s report requests that the wage salary and employer expenses be increased by about 18.6 percent.

Patel said this is a tremendous increase considering that during the second period, the employees retain their status as employees of the CNMI Retirement Fund.

Patel noted that most of the employees of the Fund are part of the CNMI civil service and that the government has been under austerity measures, preventing any civil service employee salary increases.

“The government’s financial resources are limited, and thus should be managed in the most efficient and judicious manner,” she said.

On the government’s repeated request for Tang to provide regular monthly reports, Patel said they have not received one to date. Such reports, she pointed out, are an integral part of the smooth compliance with the Betty Johnson settlement agreement in the future.

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