The NMI Retirement Fund said that the government would be able to save up to $40 million from the new retirement law that stops various benefits to employees.<\/p>\n
\u201cAltogether, it is projected that the government can save as high as $40 million. That is, if you penalize everybody who violates [the provisions],\u201d said Fund administrator Karl T. Reyes on the implementation of Public Law 13-60 or the Retirement Integrity Assurance Act.<\/p>\n
Reyes said that, based on an actuarial study, the government would save $4 million alone by stopping the vesting of education and military credits.<\/p>\n
The Fund just finished the law\u2019s rules and regulations last month. The proposed regulations are now up for public comments.<\/p>\n
Reyes earlier disclosed that some employees petitioned for exemption from the non-vesting of education, saying that they were already pursuing a degree when the law was enacted in 2003.<\/p>\n
Fund board chairman Joseph Reyes had said that, based on the legal opinion of the Attorney General\u2019s Office, this petition may not be granted.<\/p>\n
He said the Fund intends to comply with the new retirement law, which, he said, provides that it would stop vesting credits for education service effective 2003. <\/p>\n
\u201cThe law is the law. Regulations are put in place to put teeth [in the law], but not to change [it],\u201d he said.<\/p>\n
Besides education, the new law also stops vesting military credits. <\/p>\n
Further, it merges Class I and Class II retirement categories to ensure a uniform rate, discourages early withdrawal of contributions, repeals the 3-percent bonus for certain elected officials and benefits for board and commission members.<\/p>\n
It also stops vesting credits for compensatory time, used sick leave, and prior service. <\/p>\n
The law imposes penalties on early withdrawal of contributions and restricts re-employment for a period of six months unless the contributions are returned to the Fund.<\/p>\n
Further, the law calls for the restructuring of the early retirement provision for Class I members to encourage them to retire before reaching 62 years.<\/p>\n
Government authorities believe that these changes would reduce government payroll costs and free up additional funds for remittance as employer contribution to the Retirement Fund. <\/p>\n
Currently, the government is required to shoulder 36.7 percent of employees\u2019 retirement contribution. But most government offices could only remit 24 percent.<\/p>\n
Last month, the government even struggled to meet this obligation, creating alarm among retirees who get paid using the contribution of active members.<\/p>\n
The central government owes the Fund $85 million in employer contribution. This forms part of the over $526 million in Fund\u2019s unfunded liability. <\/p>\n","protected":false},"excerpt":{"rendered":"
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