Taisakan questions transfer of service credits

Northern Islands Mayor Valentin I. Taisakan is questioning the clarity of amendments being proposed under House Bill 14-345, which seeks to allow the transfer of service credits between married couple.

The proposed amendment, submitted in June, aims to mandate the Retirement Fund to allow the transfer of up to five years service credits between married persons who are members of the Fund and that the transfer of credit should be within the same class.

Taisakan’s concerns focused on questions regarding different salary levels between husband and wife. In a letter to House Judiciary and Government Operation chair Rep. Jesus SN. Lizama, Taisakan questioned the effect of the proposed amendment if the husband and wife are in the same class but the husband receives a gross annual income of $20,000 while the wife receives $50,000 annually, and the wife has only five years before retirement. “What will happened if the husband opts to transfer his five years service credits to his wife for immediate retirement?”

“Would the wife be entitled to the $50,000 retirement benefit; if yes, would it not add to the current unfunded liability of the Fund? How is a service credit transferred from the wife to the husband who earns less than the wife; and, whether it is fair or not to give the transfer of five years service credits benefit to married persons who are members of the Fund but are in different class?” he asked.

House Bill No. 14-345 Section 2 states that the Retirement Fund “shall allow the transfer of up to five years service credits between married persons, both of whom are members of the Fund. All such transfers shall be calculated to represent the actual service value to the recipient, regardless of the amount of transferred. Provided further that the transfer of service credit shall be on the same class.”

Taisakan is also concerned about the provision: “All such fund shall be calculated to represent the actual service value to the recipient, regardless of the amount of transferred.”

He said the phrase “actual service value” is not clear. “What does it represent or mean? Is it the actual service transferred or the dollar value of the service transferred or both the actual service and income earned?” he asked.

The Northern Islands mayor said that he is raising these issues just to make the amendments clear and fair to other members of the Retirement Fund.