CNMI House Passes Second Social Security Transition Measure

admin's picture

Retirees closer to enrolling with federal retirement program

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, Aug. 22, 2012) – The House of Representatives yesterday passed the second measure that will move Commonwealth of the Northern Mariana Islands’ (CNMI) government employees from the dying NMI Retirement Fund to U.S. Social Security Administration.

By a vote of 17 to 1, House Bill 17-315 is now on its way to the Senate which cannot act on the fiscal year 2013 budget without the two Social Security measures.

Last month, the House passed House Bill 17-312 that "expresses a desire" to move CNMI government employees to the federal pension program.

H.B. 17-315 will make government officials and employees mandatory members of the federal insurance program.

However, it will allow the Fund’s defined benefit (DB) plan members to voluntarily leave the local retirement system, move to U.S. Social Security, and withdraw their retirement contributions. It requires the Fund to disburse 25 percent of the DB contributions to the members within 30 days of approval of the request to terminate Fund membership.

Only Rep. Edmund S. Villagomez, Covenant-Saipan, voted against the bill, saying he has many concerns that remain unanswered, including the future pension of retirees.

Villagomez said even if active members move to the federal pension program, the Fund’s life still need to be extended in order to meet its obligations to the retirees, many of whom rely on their pension checks.

The FY’13 budget bill, he noted, appropriates $11 million only for the Fund which pays retirees $70 million a year.

The government still owes the Fund about $375 million.

Those who voted in favor of House Bill 17-315 were Speaker Eli D. Cabrera, R-Saipan; Vice Speaker Felicidad T. Ogumoro, Covenant-Saipan; House Floor Leader George N. Camacho, Ind.-Saipan; House Minority Floor Leader Joseph P. Deleon Guerrero, R-Saipan; Reps. Ramon S. Basa, Covenant-Saipan; Ralph S. Demapan, Covenant-Saipan; Sylvestre I. Iguel, Covenant-Saipan; Raymond D. Palacios, Covenant-Saipan; Stanley T. Torres, Ind.-Saipan; Joseph M. Palacios, R-Saipan; Ray N. Yumul, R-Saipan; Ray A. Tebuteb, R-Saipan; Tony P. Sablan, R-Saipan; Francisco S. Dela Cruz, R-Saipan; Janet U. Maratita, R-Saipan; Trenton B. Conner, R-Tinian; and Teresita A. Santos, Ind.-Rota.

Reps. Fredrick P. Deleon Guerrero, Ind.-Saipan, and Froilan C. Tenorio, Covenant-Saipan, were absent.

Basa’s Ways and Means Committee recommended passage of the bill but not after removing the provision that allows for the early retirement of those who have worked for the government for more than 15 years.

During the deliberation yesterday, minority leader Deleon Guerrero asked why the provision was removed.

House legal counsel John Cool said early retirement is considered a benefit increase so it requires actuarial analysis and a dedicated source of funding. It also has to be submitted to voters for approval.

The provision, the committee report stated, increases the costs to the Fund and may delay the implementation of the measure.

Government employees in the gallery, most of them police officers and firefighters, applauded after the House passed the measure.

Joe Pangelinan, Office of Personnel Management’s chief of employees development, said they are grateful to those who supported the bill.

He said they will now urge the Senate to pass it as well.

Pangelinan said H.B. 17-315 addresses the concerns of the Fund’s active members and allows them to get their money back.

"I believe it’s reasonable. They gave us the option to decide whether to stay with the Fund or withdraw our contributions without any penalty and without losing our jobs. When we refund our money at least we will be with the U.S. Social Security," he said.

Pangelinan also believes the measure addresses the concerns of the retirees because it removes future unfunded liabilities and focuses on releasing the retirees’ pension checks.

Rate this article: 
No votes yet

Add new comment