NMI Retirement Fund Administrator Juan S. Torres yesterday said he will ask Gov. Pedro P. Tenorio to immediately sign a piece of legislation which seeks to eliminate the 30 percent retirement bonus in order to save the financial integrity of NMIRF.
Due to the effects of Asia’s financial crisis, the Fund’s investment in the region’s stock market, which is the secondary source of its annuity payments, has been greatly affected. Aside from this, Mr. Torres said the government can no longer afford to continue granting the benefit because of declining revenues.
“It may be a bitter pill to swallow but we have no choice but to do this with the current economic difficulties. The government has been generous for a long time, now it is time to cut cost,” he said.
The NMI Fund chief has assured the public that those who are eligible to receive the benefit will not in any way be affected even if the governor signed the proposal into law. But some government officials have already raised concerns on the failure of the Legislature to clarify who would lose such benefit as it is subject to different interpretation.
Mr. Torres lobbied for the passage of the measure put forward by Rep. Heinz S. Hofschneider to repeal the Commonwealth Early Retirement bonus Act of 1993 by Dec. 15, 1999.
The 30 percent bonus drains the resources of the Fund because it is factored into government employees’ retirement benefits. For example, a government employee who receives an annual salary of $50,000 will receive an additional $15,000 to reflect the 30 percent bonus upon retirement. Since the bonus is included by the Fund when it computes the annuity payment, the retiree’s yearly pension automatically becomes $65,000.
While the Fund has not made any analysis on how much it will save if the governor signed the bill into law, Mr. Torres said the move would reduce the agency’s burden considering that there are 5,000 government employees.
A week before the Senate session, Mr. Torres wrote to Senate President Paul A. Manglona seeking the passage of the bill before the 11th Legislature adjourns sine die.
“Without the Senate’s swift and positive action, the Fund’s financial integrity may be further eroded and may very well threaten the entire program itself,” said Mr. Torres.
Finance officials have proposed to the Legislature last year for the repeal of the law in a move to cut down government’s expenditures. The government has been remiss in its payment of the 30 percent bonus to civil service employees upon retirement after 20 years of service due to economic difficulties confronting the administration.
Complaints from retirees have mounted in recent years over delays in payment of bonus and denial of the retirement benefits because it is not computed as part of their monthly pension.