Legislature told to plug loopholes in retirement law

NMI Retirement Fund Administrator Juan S. Torres has asked the assistance of House Speaker Benigno R. Fitial in plugging the loopholes in the current retirement laws which has extremely affected the financial stability of the agency.

While showing appreciation for the House Speaker’s gesture in assisting the Fund resolve this problem, Mr. Torres warned the Legislature against passing measures that will only contribute to the depletion of the agency’s assets.

The Fund is currently experiencing problems in its cash position due to the failure of the CNMI government to pay its contribution now totaling $30.1 million.

Mr. Torres also cited the excessive withdrawals by employees’ contributions from 1996 to 1999 which led the Fund to pay out refunds amounting to $20 million.

“In many cases, employees were allowed to resign for the sole purpose of withdrawing their contributions, then rehired shortly thereafter. This is not right and could have been mitigated if the rehiring policy was not so laxly applied,” Mr. Torres wrote to the House Speaker.

The Fund has asked the House Speaker to defer action on six proposed measures which will contribute to the reduction in the Fund’s assets. “All of these bills will put a financial burden on us and if we continue doing this, we will not be able to meet our obligation to the retirees,” Mr. Torres warned.

Since he assumed the post as the Fund administrator, Mr. Torres said he has been working with the staff in identifying areas which needs improvement on the current retirement statutes that have allowed erosion of the Fund’s assets. He has asked for a meeting with the legislative leaders in discussing the problem areas which require immediate solution.

The House Speaker has earlier sent a letter to Mr. Torres offering help in working with the Fund to ensure solvency of the retirement program. Mr. Fitial has asked for an analysis of the Fund’s current status and recommendations on how the present problems could be resolved.

As a result of the increase in number of employees who are seeking a refund of their contribution to the NMI Retirement Fund, Mr. Torres has asked Gov. Pedro P. Tenorio not to take them back if they want to return to civil service to discourage people from leaving government service early.

Mr. Torres has expressed alarm on the destabilizing effect to the financial condition of the Fund if a huge number of employees would seek a refund all at the same time. Under the present set-up, only those who have rendered less than 10 years in government service can still take back their contribution to the Fund.

The Fund chief asked the governor to help the agency in discouraging people from resigning and taking their money out by not allowing them to avail of a government job again.