President Toribiong To Pay Off Palau Pension Debts

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Government reportedly owes $4.3 million

By Aurea Gerundio-Dizon

KOROR, Palau (Island Times, Oct. 15, 2012) – President Toribiong Wednesday expressed a commitment to pay up Palau’s Pension Plan following the lawsuit by the Board of Trustees against him and others.

Toribiong said he convened a meeting with the board and made a commitment that the national government will be paying "in millions."

Toribiong said he is puzzled by his own board’s lawsuit. With the elections just around the corner, the timing of the lawsuit is reportedly questionable.

The president also noted that the numbers cited by Pension Plan go back to 2006, three years before this Administration took office.

Toribiong and Vice President Kerai Mariur, who is also Finance Minister, issued a joint statement saying "this administration has paid everything through the end of Fiscal Year 2011." Treasury Director Marino Rechesengel reportedly confirmed it.

But despite that, the Office of the President has reportedly agreed to negotiate a settlement to this case based upon the records of the Pension Plan and the Ministry of Finance.

In the complaint, Pension Plan claimed that since December of 2011 to date, the government has failed to remit payment to Pension Plan. The government is reportedly deducting contribution for Pension from employees every pay period, for 22 pay periods, but no transfer of funds to Pension Plan was made.

As of October 4, the national government allegedly owed Pension Plan the amount of $4,354,349.84. This amount includes $3,101,713.62 in principal and $1,252,636.22 in interest at a rate of 18 percent per annum (total interest was accrued since October of 2006 according to the complaint).

Pension Plan further claimed to have sent letters on eight separate occasions to the National Treasury and asked for payment but there was no response from the government. Non-remittance of pension funds after 22 consecutive pay periods resulted in the filing of the lawsuit.

Toribiong said he considers this an in-house issue and should be resolved internally between the Pension Plan Board and the national government.

Toribiong added he will ensure all beneficiaries shall continue to receive their pension for as long as they are eligible.

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