Retirement Fund wraps up regulations for a 2003 law

The NMI Retirement Fund hopes to finalize this week the rules and regulations for Public Law 13-60, which was enacted two years ago.

Fund administrator Karl T. Reyes said the committee tasked to draft the rules and regulations are expected to finish it on Thursday and submit it to the Commonwealth Registrar for public review.

Reyes said the review and drafting of regulations took a considerable time “because we went over it section by section.”

“It’s a very precise law so we want to make sure that we’re implementing it accordingly,” said Reyes.

He said the committee, chaired by NMI Fund board member Rosita Santos, gets legal advice from government lawyer Maya Kara. The team was previously guided by assistant Attorney General Ben Sachs, Reyes said.

The Retirement Integrity Assurance Act, which was signed into law in December 2003, aims to remove unfunded liabilities in the government’s retirement program and, in the process, enhance the financial solvency and viability of the local Retirement Fund.

The law, among others, merges Class I and Class II retirement categories; discourages early withdrawal of contributions; and adopts the U.S. Social Security System’s cost of living allowance model.

In hopes to maintain financial integrity, the law repealed the 3-percent bonus for certain elected officials, benefits for boards and commission members, vesting credits for education service, military service, compensatory time, and used sick leave, and prior service vesting credit.

The law imposes penalties on early withdrawal of contributions and restricts reemployment for a period of six months unless the contributions are returned to the Fund.

Further, the law calls for the restructuring of the early retirement provision for Class I members to encourage them to retire before reaching 62 years old.

Authorities believe that these changes would reduce government payroll costs and free up additional funds for remittance as employer contribution to the Retirement Fund.

Among others, the law prohibits anyone resigning from the government to get back so soon or no earlier than six months.

Reyes said that people would resign and get re-employed in government after seven days.

“Now, they can’t work until six months later. If they do it earlier, they will be penalized,” said Reyes.

There are some 5,000 employees working in the government right now.