{"id":1082,"date":"2012-01-15T05:48:05","date_gmt":"2012-01-15T05:48:05","guid":{"rendered":"http:\/\/newspaper.ctsi-logistics.com\/?p=1082"},"modified":"2012-01-15T05:48:05","modified_gmt":"2012-01-15T05:48:05","slug":"chamber-suggests-pension-cuts","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/chamber-suggests-pension-cuts\/","title":{"rendered":"Chamber suggests pension cuts"},"content":{"rendered":"
Larger cuts for retired elected officials, judges<\/div>\n
By Haidee V. Eugenio
\nReporter<\/div>\n

The Saipan Chamber of Commerce is recommending ways to help improve the NMI Retirement Fund’s fiscal conditions, including a 5- to 7-percent cut in current retirees’ benefits and higher cuts in benefits paid to retired government officials such as governors, lawmakers and judges, as well as further spending cuts in government.<\/p>\n

This early, some retirees are supporting the proposal.<\/p>\n

Mario Taitano, a retiree, said yesterday if the recommendation is an \u201cacross-the-board\u201d cut in benefits, then that is something he would support.<\/p>\n

\u201cThere are so many ways that the three branches of government could help the Fund. But if we’re talking about benefit cut as the Chamber is recommending, then I’m all for it if it’s not more than 10 percent and if it is across the board,\u201d Taitano told Saipan Tribune.<\/p>\n

Douglas Brennan, Chamber president, said the Chamber has spoken with current Fund retirees who have said that the \u201cmost realistic\u201d cut in pensions they are \u201cmore than willing to agree to\u201d is 5 percent to 7 percent.<\/p>\n

\u201cThat, combined with larger reductions in benefits paid to retired legislators, governors, lieutenant governors, secretaries, directors, judges and other high-income earners would decrease the $70 million annually paid out,\u201d Brennan said.<\/p>\n

He said any reduction in paid benefits should immediately be invested to earn badly needed income for the Retirement Fund.<\/p>\n

\u201cIf 50 percent of that $70 million were invested, the Fund would correct its downward spiral,\u201d he said.<\/p>\n

Brennan said the Chamber believes the much more can be accomplished through further reductions in the CNMI government’s spending.<\/p>\n

In fiscal year 2011, for example, preliminary government data shows a $25.8 million budget deficit, bringing the cumulative figure to some $370 million. This, despite austerity measures that include 16-hour cuts biweekly and unpaid holidays.<\/p>\n

Brennan said the bottom line is that \u201cthe CNMI government needs to function in a more business-like manner in order to protect and serve their employees.\u201d<\/p>\n

\u201cThrough reductions in benefits to more realistic and sustainable levels and greater accountability to the island residents, voters and taxpayers, it is possible the Retirement Fund can be saved,\u201d he said.<\/p>\n

Rep. Teresita Santos (Ind-Rota), chair of the Special House Committee on the Retirement Fund, said her panel welcomes any suggestion, recommendation, or approach in trying to resolve the Fund’s financial problems.<\/p>\n

\u201cAs the old saying goes, two heads [are] better than one,\u201d Santos said, adding that the Chamber’s suggestions will be taken into consideration as the committee prepares its findings and recommendations to the full House of Representatives.<\/p>\n

Santos’ committee has started conducting meetings with agencies affected by pending bills and initiatives that seek to help the Fund, and these include the Fund, the Department of Public Land,s and the Marianas Public Land Trust. The next meeting is tentatively set for Thursday.<\/p>\n

The freshman lawmaker said they also plan to call in retirees and the public to directly hear from them their recommendations on how to save the Fund, as well as their comments on proposals to save the pension agency.<\/p>\n

Brennan said the Chamber believes the Fund \u201cshould more closely mirror other existing retirement programs.\u201d<\/p>\n

\u201cThe CNMI Retirement Fund benefits for retirees are almost unprecedented. That, combined with Fund contribution rates for CNMI employees and the government, have led to the Retirement Fund ‘perfect storm’ we are now witnessing during the CNMI’s sharp economic decline,\u201d said Brennan, who is also the general manager of Microl Corp.<\/p>\n

The Saipan Chamber of Commerce, the largest business organization in the CNMI with some 150 members, said this is the first time in its history that it is stating its position on what should be done to improve the Fund’s fiscal condition.<\/p>\n

\u201cOur interest in the stability of the Fund is purely economic. The CNMI and its employees now comprise our single largest consumer group. We need to protect and preserve their livelihood. Allowing the Retirement Fund to collapse would have an extremely negative impact on our islands for many years to come. Government employees and retirees are terrified their ‘golden years’ will be spent in poverty,\u201d he said.<\/p>\n

Brennan said the Chamber is offering the Fund, the Legislature, and the Office of the Governor its positions on how to improve the Fund’s situation \u201cas a result of the lack of fiscal integrity of the CNMI Retirement Fund, and after numerous attempts by the CNMI Legislature to increase taxes, add a sales tax, decrease rebates or tap other funding sources as a way to assist the NMIRF with its worsening condition.\u201d<\/p>\n

The Chamber said a review of the information it has shows that the CNMI’s 2010 fourth quarter deficit stood at approximately $330 million. Of that deficit, nearly 80 percent was a Retirement Fund debt liability, it said.<\/p>\n

\u201cIf that Fund liability was retired in the proper manner, the CNMI government wouldn’t really be that bad off,\u201d the Chamber said. \u201cThe CNMI, not that long ago, essentially had $250 million to spend. Today it’s $100 million. Absolutely, all caution should be exercised to not further decrease revenue to the CNMI, but the real dilemma is to find ways to decrease the demand upon the Retirement Fund itself.\u201d<\/p>\n

The Chamber said its Government Relations and Economic Development Committee and the board of directors maintain that one of the first steps that should be taken is to reduce the benefits currently being paid to current CNMI retirees, as well as to future Fund beneficiaries.<\/p>\n

\u201cAn external audit should be undertaken to determine if there have been any irregularities in payouts, and if so, measures should be taken to recover those funds,\u201d it added.<\/p>\n","protected":false},"excerpt":{"rendered":"

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