The NMI Settlement Fund trustee asked the federal court yesterday to order the Northern Marianas College to comply with the terms of the settlement agreement in Betty Johnson’s class action by paying its employer contribution, now totaling $75,080.79.
The Settlement Fund trustee, through counsel Dean Manglona, also asked the U.S. District Court for the NMI to require NMC to pay all future employer contributions at a rate of 30 percent.
Manglona asserted that other CNMI agencies choose to cooperate and work with the Settlement Fund to find the funds to make the full 30 percent contribution from their budget.
“NMC has no excuse for not making the full 30 percent employer contribution for its employees,” the lawyer said.
To allow NMC to pay a lower rate would not only lead to an absurd result, Manglona said, but would also be completely unfair to the agencies that comply and the retirees who are forced to subsidize NMC.
Settlement Fund trustee Joyce Tang said the settlement agreement in Johnson’s case requires the NMI government and autonomous agencies to pay employer contributions to the Settlement Fund after each pay period at a rate of 30 percent of total payroll, pursuant to Superior Court Associate Judge Kenneth Govendo’s order on Aug. 11, 2011.
As of pay period ending Feb. 21, 2015, the CNMI government and all other governmental entities, except for NMC, has been paying their employer contributions based on the reduced 30 percent rate, Tang said.
She said NMC currently pays employer contributions at the incorrect rate of 20 percent.
She said that in a conference call last Feb. 24 with Gov. Eloy S. Inos, she asked the governor as to his understanding of the government’s responsibility to fund the shortage of NMC’s employer contribution.
Tang quoted Inos as saying it was his understanding that NMC was responsible for the entire 30 percent employer contributions rate and that any previous agreement between the NMI government and NMC was limited in 2008 and not intended to apply indefinitely.
Following the call with Inos, Tang sent a letter to NMC legal counsel Mark Scoggins informing him of the government’s position and demanded payment in the amount of $71,749.43.
Tang said Scoggins responded on March 3, 2015, stating, “NMC’s position on this issue will not change.” She said Scoggins maintains that NMC will continue to rely on the plain language of the settlement agreement and will not increase its contribution.
In NMC’s reply to Tang’s report filed in federal court, Scoggins said they informed the trustee of their position that the plain language of a section of the settlement agreement states that “CNMI autonomous agencies shall make supplemental payments to the Settlement Fund in the amount of the employer contributions for these Settlement Class members at the same contribution rate they were paying as of June 26, 2013.”
Scoggins said NMC was paying at the contribution rate of 20 percent on June 26, 2013, and NMC is paying “the same contribution rate NMC was paying as of June 26, 2013.”