Changes to retirement law opposed anew
NMI Retirement Fund Administrator Juan S. Torres yesterday maintained his strong opposition against a proposed measure that will allow former government employees entitled to a salary adjustment in 1991 the option to convert their entitlement to vesting service.
Sponsored by Rep. Antonio M. Camacho, HB 12-126 was approved by both chambers last month and has been sent to the governor for his signature.
According to Mr. Tenorio, the Fund’s money belongs to its 5,000 individual members and are not considered public funds or general revenues of the government, thus, it cannot be used to appropriate salary increases.
He suggested that the government should look at ways to pay the employees the salary increase due them by installment basis or a 20 percent adjustment every year for the next five years. The House said it is an alternative from compensation especially when employees have not received their mandated pay raise.
“Everybody is suffering and looking for additional funds to cover their expenses. I am not saying that this is not a priority but if you convert the supposed salary increases into vesting service what good will it do to people who have already retired? Who will be responsible for the payment of the government contribution?” Mr. Torres asked.
Under HB 12-126, the Fund and the Department of Finance will develop and implement a formula for converting the salary adjustments into vesting service credit.
Gov. Pedro P. Tenorio has vetoed last month a similar proposal under SB 12-51 which would have allowed government employees awaiting overdue pay hike under a nine-year-old law to convert the salary adjustment to vesting credit service.
While backing efforts by lawmakers to resolve the long-standing problem on the retroactive pay raise, Mr. Tenorio stressed that the legislation will not solve the unpaid wage increase.
The chief executive believed then that SB 12-51, if signed into law, would have impaired responsibilities of the NMIRF Board and created funding and administrative problems for the agency.
Mr. Torres stressed that mandating the Fund to pay for an additional improvement in current pension benefits without an adequate infusion of external funding source may be compromising the trustees, administrator and its employees of their fiduciary responsibilities to protect and manage the assets in a prudent and sound manner as prescribed under the CNMI Constitution.
