Social Security Buyback For NMI Fund Members ‘Voluntary’

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Buyback an option once federal government approves transition

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, July 19, 2012) – Acting Gov. Eloy S. Inos yesterday disclosed that under the administration plan, current Northern Mariana Islands (NMI) Retirement Fund members will not be forced to join the U.S. Social Security.

In the governor’s conference room, Inos and lawmakers finalized the draft bill that will allow NMI Retirement Fund members to move into the federal retirement system.

The still unnumbered bill also gives those who have served more than 15 years in the government to file for early retirement. The benefits "shall be calculated using the prorated retirement annuity amount." That is, they will get what they have contributed so far.

Senate President Paul A. Manglona, Ind.-Rota, said everybody "generally" agreed with the administration-backed measure although there are still a few concerns that he believes they can resolve later on.

In an interview after the meeting, Inos told reporters that the House members and senators wanted to know more about the administration plan. He noted that yesterday’s meeting was part of an ongoing "consultation process."

According to the draft bill, the Class 1 or Class 2 member of the defined benefit plan with less than 20 years of service may elect to voluntarily separate from the Fund.

The defined contribution plan "shall become voluntary and supplementary upon the extension of the federal insurance plan," the bill stated.

"We seem to have a good meeting and understanding — we had a meeting of the minds as to how things will happen under this scenario," Inos said.

"It is a product of all the elected leaders and not just the administration and the House," he added.

Inos said the buyback into Social Security will be voluntary and only if authorized by the U.S. Social Security Administration.

He noted that some people believe they don’t need the buyback, but there are others who wish to remain in a retirement system.

"So how do we deal with that thing? If they’re going to do the buyback, we are going to make sure it is voluntary because we are not going to force them," Inso said

He reiterated that buying back into U.S. Social Security requires payments.

Some active Fund members have recently expressed support for the effort.

Jose Pangelinan, Office of Personnel Management’s chief of employees’ development, told lawmakers last week that due to the enormous and serious problems of the Fund, they have no choice but to support the transition to U.S. Social Security.

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