House panel meets with Fund, DoF on pensions

The House of Representatives’ special committee is seeking consultation with the Retirement Fund and the Department of Finance to discuss some concerns on a bill that would allow the Fund to pay new retirees less than their full pension.

The special committee headed by Vice Speaker Joseph Deleon Guerrero reached a decision on Wednesday to hold a meeting with the Retirement Fund and Finance Secretary Eloy Inos. The meeting was set for today, Friday, at 9am, at the Legislature.

In an interview with Saipan Tribune yesterday, Deleon Guerrero said the purpose of the meeting is to answer some questions regarding the bill that the members are concerned about.

“There are people who are waiting to retire. If that bill is passed into law, depending on how much employer contribution was not remitted to the Retirement Fund, the pensioner’s pension would be reduced correspondingly,” he said.

Senate Bill 16-36 proposes to amend Public Law 15-61, which specifically prohibits the Retirement Fund from applying the proportionate pension scheme.

The bill was referred to the House, which deliberated on the floor but did not reach a consensus to either pass, kill, or amend it.

This prompted Speaker Arnold Palacios to create the special committee headed by Deleon Guerrero and members Reps. Oscar Babauta, Justo Quitugua, Heinz Hofschneider, and Ralph Anthony Torres.

Palacios gave the special committee 15 days to report back to the House.

The special committee has until next week to meet with the affected agencies. After that, the committee is expected to come out with a recommendation that can be provided to House members.

Deleon Guerrero said that under the bill an employee can be allowed to retire but he or she will get a reduced pension until such time that the government pays the full retirement contribution. Only then will he or she get a full pension.

Deleon Guerrero said that under the current situation—with the Fund not entertaining any applications for retirement—he supports the bill.

However, he wants to make sure that the government employee who wants to retire is not going to be affected negatively.

“If we can improve that bill then that’s when I would support it,” he said.

Deleon Guerrero said the Retirement Fund chairman right now does not support the current version of the bill because when the House amended it, lawmakers took out the provision requiring the central government to pay back within six months or two years what it owes the retiree.

“They want a timeline. And we were concerned that if that timeline is in there and the government doesn’t remit back during that time period, then the pensioners are the ones got penalized for it,” he said.

Deleon Guerrero said when they removed that timeline, the Retirement Fund is not happy and they did not support the bill.

“So that’s partly why we’re going to meet with them is to see if we can come up with something that they can feel comfortable with and at the same time we want to make sure that the potential pensioners are protected, that they will not be penalized,” he added.

The government has stopped remitting employer contributions to the Fund since March 2006. The government reportedly owes the pension program $132 million in employer contributions, excluding penalties and interest.