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House panel studies proportionate pensions
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Posted on Aug 04 2008
The House of Representatives has formed a special committee to study legislation that would allow the NMI Retirement Fund to dole out pension based on what the government has contributed for the retiree.
Vice Speaker Joseph Deleon Guerrero will head the committee, with Reps. Heinz Hofschneider, Oscar Babauta, Justo Quitugua, and Ralph Anthony Torres serving as members.
The committee is tasked to consult with the Retirement Fund and relevant agencies, and report to the full House within two weeks.
The Lower House created the committee after failing to reach an agreement on the Senate-passed bill, which would allow the Retirement Fund to pay new retirees less than their full pension.
The legislation is designed to allow eligible government employees to retire without causing financial burden to the pension agency, which has not been receiving payments from the central government. Currently, the Retirement Fund is not processing new retirement applications at all.
Hofschneider, one of the lawmakers who oppose the bill, said that approving the measure is tantamount to validating the government’s “refusal” to pay retirement contributions to the Fund. He said that, instead of passing the bill, the Legislature should pass a budget fully funding the government’s retirement costs.
But the bill’s proponents, such as Rep. Diego Benavente, said that a fraction of the pension is better than nothing at all. “The situation we have here is real. The government does not have the money for pension contributions. As a result, government employees who are due for retirement cannot retire. This legislation will allow those employees to get something,” Benavente said.
The bill proposes to amend Public Law 15-61, which specifically prohibits the Retirement Fund from applying the proportionate pension scheme.
The CNMI government has stopped remitting employer contributions to the Fund since March 2006. Prior to that, the government had been paying only part of its contributions. According to the Retirement Fund, as of Sept. 30, 2007, the CNMI government owed the pension program $132 million in employer contributions, excluding penalties and interest.
