House sets review of retirement benefits to be purged

Calling the government’s retirement benefits excessive, the chair of the powerful House Ways and Means Committee yesterday vowed to look into the package during the deliberation of the proposed budget for Fiscal Year 2000.

“This is a serious matter and it is incumbent upon us to address it, what we do now will have a long-range effect,” said Rep. Karl T. Reyes.

He also told reporters that he had asked an employee of the Public School System, who had prior knowledge of the retirement system on Guam, to assist the committee in the inquiry

But the panel has yet to specify which benefits will be reviewed. “I hope that we will have the answer to some of the problems… that have required big volume of money from the government to pay into the Retirement Fund,” Reyes said.

The representative stressed the NMI Retirement Fund should provide the committee exact figures of the contribution made by the government, including actual collections and its liability.

Reyes also said the 24 percent share of the government for each employee is “high,” noting that retirement benefits of other states or governments are not that generous.

“It will be better if we could have the Fund audited to show how much have been paid out to the 30 percent bonus, and then how much of that is outright payment from the Retirement Fund and how much is depleted in their funds to meet the (pension payment),” he pointed out.

Local lawmakers have agreed to look into the retirement package currently being offered to government personnel, intending to pass measures that would abolish some retirement benefits for future service employees in a bid to reduce its monthly contributions amid the current financial crisis.

This is an attempt to overhaul the current retirement system of the CNMI government, which has provided generous benefits to its nearly 5,000 employees.

The move came on the heels of failure of the cash-strapped government to remit its share of the retirement contribution since January last year, accumulating more than $21 million in overdue payment.

But Reyes expressed optimism that the Tenorio administration would settle its debts on time to prevent potential deficit for the Retirement Fund, whose collections are invested in bonds and in stock markets worldwide.

“I’m hopeful that the collection of revenues increase, then probably we could barely make it but we need some ingenious way finding money to address (the obligations),” he said.

Reyes added that they have to re-evaluate laws that were passed to allow the government to dip into the retirement fund to provide benefits to its employees.

Among the recommendations broached by lawmakers during a meeting Tuesday with the governor and officials of the NMIRF were exclusion of overtime in the calculation of the retirement benefits as well as elimination of the contribution for excepted service personnel.