AS RETIREES STILL AWAIT 25 PCT PENSION PAYMENTS
The House and Senate have set emergency sessions for today, Wednesday, to pass measures intended to ensure the “legality” of Gov. Ralph DLG Torres’ authority to reprogram funds to pay CNMI retirees’ 25 percent pension payments, according to Senate president Francisco Borja (Ind-Tinian) and House vice speaker Joseph Deleon Guerrero (Ind-Saipan).
The new measures come in the wake of the Settlement Funds’ refusal, and returned check, last Friday, to pay off these pension payments using funds that Torres reprogrammed using his authority under last year’s budget act and emergency powers extended throughout the months after Typhoon Soudelor and the fiscal crisis sustained after the massive network outage last July.
The Settlement Fund, citing its duties as an extension of the U.S. district court, believes this continued reprogramming authority “is not appropriate,” that the funds serve no “public purpose,” and have asked for an “authorized appropriation.”
Lawmakers and administration officials disagree, however, and have drafted measures, with the help of the Attorney General’s Office, to guarantee that this dispute, which left over 3,000 retirees bereft of their expected payments last Friday, does not happen again.
The new measures “will allow the governor to use his reprogramming authority to pay for the 25 percent” pension, vice speaker Deleon Guerrero told reporters yesterday.
Another bill “will legalize what the Ad Litem [Trustee Joyce Tang] claimed was an illegal payment,” added Deleon Guerrero.
The bill will legalize “what was sent over there [to the Fund]. And any future payments from that source would be legal,” Deleon Guerrero said. This “would accommodate the Ad Litem’s concerns.”
He confirmed the bills would be acted on today, in the emergency session set for this morning.
One draft bill, copies of which were obtained by Saipan Tribune yesterday, “specifically authorizes” the governor to reprogram Executive Branch appropriations to pay for the 25 percent pension payments.
The draft bill reiterates the position of Capitol Hill officials that funding for the 25 percent pension payments serves “a public purpose” for which the governor can reprogram funds, a position that the Settlement Fund has disputed in letters to the governor.
“This Act is intended to remove any doubt,” the draft bill states.
The second draft bill, copies of which were also obtained by Saipan Tribune yesterday, says there is a “need to clarify that taxes allocated” to the Settlement Fund may be used to fund the 25 percent pension payments.
Current law moves 20 percent of funds collected from hotel occupancy taxes and 30 percent of funds collected beverage container taxes to the Settlement Fund, and provides that the money may be used to fund benefit increases provided under public law.
After funding these benefits, the taxes may be applied to any unfunded obligation the Commonwealth has to fund.
The draft bill amends current law “to specify that taxes allocated to the Fund may be expended to fund retirees’ 25 percent pension payments.”
“This Act is intended to cure any ambiguities that there may be with regard to the Secretary of Finance’s authority to apply taxes due to the Fund to fund” these payments, the bill states.
“To ensure that the law is consistent with the Legislature’s intent to allow taxes to be sued for this purpose, the Legislature specifically finds that retroactive application of this Act is necessary and appropriate.”
Borja told Saipan Tribune yesterday that the House and Senate would be acting on the concerns of Tang.
“To ensure that she doesn’t question anymore the money transferred,” Borja explained. “That will clarify a lot of her concerns.”
Borja believes they “have been doing [the reprogramming of funds] legally” but “to not further delay the disbursement” of the pension payments, they “want to meet half way” so it does not happen again.
Saipan and Northern Island Delegation lawmakers also passed a bill yesterday to, among others, provide the Torres administration with some $1.8 million to fund the pension payment shortfall.
However, this is seen as a stop-gap measure that lawmakers from both the upper and lower house believe could have been prevented with better communication and numbers between the Department of Finance, Legislature, and the Settlement Fund, which has been lamenting these concerns over the last year—or—an amendment to casino law to apply the annual license fee of $15 million in full to the 25 percent pension payment and ease the expected shortfall.
Capitol Hill officials appear to be unified on the “legality” of Torres’ actions to provide for the retirees.
“I have yet to see a court order that it is illegal,” said Rep. Antonio Sablan (Ind-Saipan), during a SNILD meeting yesterday. Sablan believes Torres’ actions was not a question of whether there was money for funding as the amount provided was there, and that it was important for constituents to understand this.
“It is the position of our elected Attorney General that” the reprogramming “is within the scope of authority granted to” Torres under the budget act, Sablan said, and unless the reprogramming is “declared unconstitutional,” “it is incumbent on the trustee,” Joyce Tang, to disburse the money.
“We cannot subject our retirees to this every 15 days,” Sablan added.
“The 25 percent portion of the pension of our retirees,” Rep. Angel Demapan (R-Saipan) also said, “is clearly not under the jurisdiction of the settlement agreement entered into by the government and sanctioned by the Legislature.”
“The 25 percent portion of the pension is a function of the NMI Retirement Fund, not the Settlement Fund,” he added.
The Settlement Fund has prioritized the importance of the 75 percent payments over the 25 percent.
Sen. Sixto Igisomar (R-Saipan), when asked if he agreed, said this “was true.”
“The Settlement Fund does not care about anything else. They are obligated,” he said. “[Tang’s] position is that she is overseeing the 75 percent compensation obligation to retirees.”
The 25 percent, on the other hand, is a commitment from the administration and the Legislature. “That is why the casino act went into play,” Igisomar said, referring to the $15 million annual casino license fee allocated to these pension payments.
But Igisomar disclosed that the administration is considering “a change” in this process.
“If the Trustee is having potential issues with the 25 percent disbursement, [the administration] is saying they might as well take over, and handle the 25 percent disbursement themselves,” Igisomar said.
He added this was an option to be “discussed further.”