Nearly $4M needed for new retirees

Posted on Dec 30 2005

The retirement of 179 government employees this year translates to nearly $4 million in additional pension obligations for the financially struggling CNMI government.

NMI Retirement Fund administrator Karl T. Reyes said that, as of yesterday, there were 179 employees who retired from the government.

He said this batch of retirees would be “expensive” since many of them are claiming their 30 percent early retirement bonus. This incentive is given to retirees who have worked in the government for 20 years.

Reyes said that if the retirees receive an average of $21,000 a year in pension, this would mean $3.7 million in new obligations or $156,625 in additional pension costs every 15 days.

Currently, the Fund gives out $2.3 million in pension every pay period or $4.6 million a month for about 2,000 employees.

Beginning 2006, the government would be giving nearly $60 million a year for retirees a year.

The government almost failed to meet Friday the last pension payment of the year, totaling $2.3 million. The Fund only managed to get the monthly remittance from the government this week. The new infusion was used to pay off the pension obligations.

The Fund said this delay was a big concern since government offices usually pay their contributions early in the month.

Authorities earlier warned that the government would suffer heavily in terms of lesser revenues as a result of the garment industry’s downsizing and the departure of Japan Airlines this year.

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