Senator backs 30% retirement bonus cut

The Senate is likely to support a pending House measure that will seek removal of the 30 percent retirement bonus for civil service employees in light of the shrinking government revenues.

Senate Vice President Thomas P. Villagomez said he would favor a repeal of the existing law that provides the benefit to retiring government employees despite the tight financial situation in the CNMI.

“We should start cutting this benefit,” he told in an interview. “We don’t have the money to give retirees the bonus.”

But the senator maintained he would propose a time frame before removing the retirement benefit to allow employees to train subordinates if they opt to retire to avail of the bonus.

The House of Representatives has passed the bill introduced by Rep. Heinz Hofschneider seeking the elimination of the benefit, which is equivalent to 30 percent of the employee’s annual salary and is given after 20 years of government service.

Although Gov. Pedro P. Tenorio’s administration had sought assistance from the legislature to repeal the law as early as October in an effort to bail the cash-strapped government out of serious financial crisis, it is only now that lawmakers are tackling the proposal.

The House move, however, stemmed in large from complaints from recent retirees who have yet to receive their lumpsum bonus due to what finance officials claimed as unavailability of funds.

They had lobbied legislators for a guarantee that the benefit will be reflected in their pension and that they stand to receive the money when the government cash flow improves in the next few years.

Under Hofschneider’s proposal, a legal mechanism will be set up to prevent non-receipt of the bonus as well as to force the government to appropriate available funds in any given fiscal year to be earmarked specifically for the purpose.

The proposal also seeks to grandfather retirees until December 15 of this year. At least 110 government employees are eligible to receive the bonus as of last month, costing the government millions of dollars in additional expenditures.

According to Villagomez, he would evaluate the House measure whether those retirees who have yet to get their bonus are included in the protection it has proposed.

“What will happen those who have not received their benefits? Are we going to grandfather them also,” he asked.

Villagomez earlier had filed a similar measure in the Senate which has referred it to a committee for further deliberation. The chamber is expected to tackle the pending legislation during its next session.