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Retirement Fund chair says bailout bill will kill Fund
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Posted on Dec 21 2008
Northern Mariana Islands Retirement Fund board of trustees chair Juan T. Guerrero said a bill that was introduced Friday in the House that seeks to provide a one-time bailout of government obligations to the Fund by allowing eligible government employees to retire “will kill the Fund basically.”
Guerrero told Saipan Tribune that House Bill 16-201’s intention is to reduce and save money for the government, but then “throw the money back at the Retirement.”
Guerrero said the legislation will provide for two years credit to those who are intending to retire.
“Right now the government owes a lot of money to the Retirement. They’re coming up with another bill that would place another burden on top of what is owed,” he said.
The chairman pointed out that it is a good gesture to get the government out by about 300 employees.
“But when the bill fails to address the funding source it’s a useless bill itself,” he said.
H.B. 16-201 introduced by Rep. Heinz S. Hofschneider and seven other lawmakers, seeks to establish a government service severance package for employees funded by the general fund with at least 18 years of government service.
The legislation proposes to reserve $7 million from the Fund to pay for the government service severance package.
The bill states that as many as 300 government employees are now eligible to retire but will not be permitted to retire until the government pays its contribution to the Fund.
“Based on current financial figures, the Commonwealth government is barely making payroll and vendor payments, and will not be in a position to continue operating at its current level for long, which will lead inevitably to terminations thereby putting some long term government employees at risk of losing their jobs,” Hofschneider said in the bill.
But Guerrero said he doesn’t know what’s the real purpose of the legislation.
“It is political? Or common sense? If they are going to require the Retirement to shoulder the expense at this stage with the market crisis, it’s not going to be possible,” Guerrero said.
The chairman said they will submit their comments to the House.
“We need to be realistic on what the Retirement can do without appropriate funding at this point,” he added.
