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NMIRF says reimbursement plan may face legal problem
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Posted on May 19 1999
There may be legal obstacles to a plan by the Tenorio administration to seek reimbursement from the NMI Retirement Fund of its share for employees who have resigned from public office.
Likewise, the Retirement Fund board is not likely to entertain the proposal unless the governor makes a formal request, according to acting Administrator Fred Camacho.
“It’s very unclear at this point,” he said in an interview. “The Retirement Fund statute does not address the issue whether the government could or should refund its contributions.”
While Gov. Pedro P. Tenorio has yet to come out openly supporting the move, administration sources said he will ask the Retirement Fund for a recomputation of its obligation to the agency to include the share the government had paid for its workers who have withdrawn their membership from the NMIRF.
According to Camacho, this issue has not come up in the past and this is the first time that the government is “exploring” that possibility. “We have not met to discuss this request.”
Under the proposal, the government will collect back its contributions on behalf of some employees who have pulled out their membership from the NMIRF.
The plan is apparently prompted by the $21 million in contributions owed by the government to the Retirement Fund that have not been remitted since January last year due to the current financial crisis besetting the CNMI.
So far, the administration has settled about $1.7 million of the amount which represents share of the government for every contribution of its close to 5,000 employees.
Every month the government has to come up with approximately $850,000 to cover the employer share, while the NMIRF spends some $2.3 million to pay the benefits of its members.
Worried over the depleting cash resources, the Retirement Fund is looking at selling some stocks and bonds from its multimillion-dollar investment portfolio to raise at least $5 million to ensure prompt payment of pension to some 1,200 retirees.
