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Admin drafts two bills on transitioning to US Social Security
Members of the House leadership are now reviewing two of the Fitial administration’s draft bills related to the government’s plan to transition all active government employees into the U.S. Social Security retirement program.
The House leadership is so far agreeable to what they have read in the draft bills but House floor leader George Camacho (Ind-Saipan) said they are waiting for the final version of the bill.
One of the bills, referred as the “CNMI Pension Recovery and Survival Act of 2012,” amends the Commonwealth Code pertaining to the defined contribution and defined benefit plans of the CNMI’s retirement system to allow for the transition to participation in the federal Social Security system.
In its findings, the draft bill says the CNMI government faces an enormous unfunded governmental obligation to participants in the retirement system.
Moreover, for several years now, the government has been unable to follow a fiscally sound deficit reduction program, the draft bill says.
“The Legislature recognizes that the Commonwealth lacks the financial resources to pay off the present unfunded government liability, and that a rescue and reform plan is necessary to restore the system to a more sound financial footing,” it adds.
The government owes the Retirement Fund over $320 million in unpaid employer contribution plus interests.
The second draft bill “expresses the desire” of the CNMI to have the insurance system commonly known as “Social Security” extended to the officers and employees of the CNMI government and its political subdivisions and instrumentalities.
Gov. Benigno R. Fitial, in an interview on Wednesday, said the administration has “already pretty much got the Social Security Administration to accept the transfer of all the active government employees.”
Fitial said SSA needs legislation from the CNMI authorizing such transfer.
He said a five-year buyback is pretty much accepted.
“If [Delegate Gregorio Sablan] Kilili wants to have a 10-year buyout, then we need legislation, but the five-year minimum buyout does not need [U.S. legislation],” Fitial told reporters at the Fourth of July festivities.
Fitial placed the Fund under a state of emergency after a federal judge dismissed the Fund’s Chapter 11 bankruptcy petition. The administration wants the Fund to be placed under the Department of Finance mostly to disburse retirees’ pension, while active members are transitioned to the U.S. Social Security retirement system.
A Senate joint resolution that the Senate adopted last week seeks to block the governor from abolishing altogether the Retirement Fund board of trustees, among other things.
Rep. Edmund Villagomez (Cov-Saipan) said yesterday that the House leadership’s priority in today’s session is to act on the fiscal year 2013 budget concurrent resolution.
Rep. Joseph Palacios (R-Saipan) said there was not even a mention whether the House would entertain today the Senate joint resolution amending the governor’s executive order placing the Fund under a state of emergency.
