Previous Story
Senate approves proportionate pension bill
|
Posted on Jul 02 2008
The Senate has passed a bill allowing the NMI Retirement Fund to pay new retirees less than their full pension.
The bill, cosponsored by Sens. Paterno Hocog and Paul Manglona, cleared the Senate by a unanimous vote. It now heads to the House of Representatives for action.
The legislation is designed to allow eligible government employees to retire without causing financial burden to the pension agency, which has not been receiving payments from the central government.
The Retirement Fund is currently not processing applications because the government is not paying contributions.
“This amendment [to the law] is temporary [and will be implemented only] until such time as the CNMI government can become current on the deficient employer contribution and remit pursuant to applicable laws all actuarially determined employer contributions,” the bill states.
“Amendment of Public Law 15-61 is crucial in order to ensure NMI Retirement Fund members’ assets are continually protected and yet, still allow eligible Retirement Fund members to receive a proportionate amount of their pension upon qualification,” it adds.
P.L. 15-61 prohibits the Retirement Fund from applying the proportionate pension scheme.
The Senate-approved bill would allow the Fund, on a case-by-case basis, to make full pension payments to individual members if their employing agency makes a full payment for them, or if the Legislature appropriates the money.
It also includes a provision that would make it illegal for the government to replace a new retiree unless the retiree’s contribution is fully paid or the Legislature allows the hiring.
The CNMI government has stopped remitting employer contributions to the Fund since March 2006. Prior to that, the government had been paying only part of its contributions.
According to the Retirement Fund, as of Sept. 30, 2007, the CNMI government owed the pension program $132 million in employer contributions, excluding penalties and interest.
