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Govt fails to remit retirement obligation
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Posted on Apr 17 2006
The central government failed to remit its employer contribution to the NMI Retirement Fund for last week’s pay period, according to Fund administrator Karl T. Reyes.
“They [central government] did not pay the last time. We didn’t get it,” said Reyes in an interview yesterday.
He said the Fund was forced to tap its “local investments” to pay off its retirees’ pension.
“We’re tapping into local investment now, which is very bad,” he said.
He said the central government is obliged to remit $1.3 million per pay period. However, the Fund has only been getting a much lesser amount in view of the government’s fiscal crisis.
Before last week, the Fitial administration was remitting some $900,000 per pay period.
“We were expecting $950,000 last week,” said Reyes.
He said this was the first time the administration failed to remit its employer contributions.
Finance and budget officials said during a public hearing last week that, among the options to prevent a large deficit this year is for the administration “to delay the payment” of employer contribution to the Fund.
Other alternatives include cutting the government employees’ salaries by 10 percent.
Meantime, Reyes warned that, if the administration continues to neglect its retirement obligations, retirees or other Fund members might end up suing the government, including the Fund.
“If we don’t get contribution, we won’t be able to pay off the obligations. The retirees may sue the board, the governor, the Legislature,” he said.
The Fund has some 8,000 members, including 2,000 retirees.
The central government’s arrears with the Fund in employer contribution now totals over $85 million.
Autonomous agencies, according to the Fund, are current with their employers’ contribution.
The government shoulders 24 percent of each employee’s retirement contribution.
