House acts on retirement bill

The House of Representatives has set in motion an administration’s request to remove a retirement bonus given to civil service employees in fear the benefits may throw the cash-strapped government into deeper financial woes.

A bill grandfathering those employees eligible to receive the bonus passed the House last Friday as members assured recent retirees that they will receive their money once the local revenue collections improve in the next few years.

Rep. Heinz Hofschneider, author of House Bill 11-359, said the proposed measure will guarantee payment of the bonus equivalent to 30 percent of the employee’s annual salary at the end of his government service.

But he admitted that there is no specific date as to when the benefits will be provided since the availability of funds hinges on the improvement of the economic conditions on the island.

“If the governor signs this into law, he is obligated to tell the legislature that the money is available and then we can pay out the bonus,” Hofschneider told in an interview after the session.

Government employees who have recently retired, however, appeared dissatisfied over the legislative assurance, citing the government is in fact complying with the existing law that provides the lumpsum bonus.

Brigida Ichihara, a principal of the Koblerville Elementary School prior to her retirement last month, pointed out that her fellow retirees from the Public School System want to know when they are getting the money due them.

“It’s very unclear,” she explained in an interview during a break in the session. Ichihara led other teachers and principals in lobbying the House last Friday.

“It could be 10 years, 20 years from now or it could be forever. We see the problem. I don’t have the solution or they don’t have either,” the outspoken former principal added.

According to Hofschneider, his bill will set up a legal mechanism for them not to lose the bonus at all and will force the government to appropriate available funds in any given fiscal year to be earmarked specifically for the purpose.

“This law will be in place until they are paid,” the representative said. “What happens to the economy, nobody knows. We don’t have a crystal ball.”

The Northern Marianas is reeling from its worst crisis in years spawned by the prolonged economic turmoil in Asia, its main source of tourism revenues and investments, that has substantially pulled down local revenues in recent months.

Last October, Tenorio asked the legislature to repeal or amend existing laws deemed to cost the government millions of dollars in additional expenditures, including the retirement bonus.

Under HB 11-359, the benefits will be eliminated after December 15 of this year. At least 110 civil servants are eligible to receive the bonus as of last November and non-receipt of the money may result to a reduction in their annual pension.

In voting for the bill, House Majority Floor leader Ana Teregeyo likened the bonus to a “Santa Claus gift — what we had back then but we don’t have right now.”

The measure now heads to the Senate for action.