Government To Remit Over $20 Million To CNMI Fund

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Final figures still ‘work in progress’: press secretary

By Haidee V. Eugenio

SAIPAN, CNMI (Saipan Tribune, June 28, 2013) – Gov. Eloy S. Inos said yesterday his administration will remit more than the earlier proposed $20 million to the Northern Mariana Islands Retirement Fund in fiscal year 2014 to meet the terms of a settlement deal that is being finalized. His administration also said there will be no work hour cuts, with the hope that the Legislature will act on revenue-generating measures.

"That one I can say yes," Inos told Saipan Tribune, when asked whether the tentative settlement deal reached on Wednesday will pave the way for more than $20 million set aside for the Fund in the fiscal year 2014 budget.

The governor is also poised to submit a revised projected revenue to the Legislature, increasing the earlier proposed government budget of $123.4 million for 2014.

Acting House speaker Frank Dela Cruz (IR-Saipan), Senate President Ralph Torres (IR-Saipan), House Ways and Means Committee chair Rep. Tony Sablan (IR-Saipan) and Rep. Christopher Leon Guerrero (Cov-Saipan) separately said yesterday they also want to see more money remitted to the Fund, although this has to be balanced with other critical needs such as public health and safety.

Inos personally participated in a three-day settlement negotiation with the parties in the Betty Johnson class action against the Fund and the CNMI government, resulting in a tentative deal reached on Wednesday.

Press secretary Angel Demapan, when asked for comment yesterday, confirmed that the administration's goal "is to remit more than $20 million to the Fund to meet the terms of the settlement."

"However, fresh out of the settlement talks that concluded [Wednesday] night, the figures are still a work in progress at this time," he said.

The Senate is currently reviewing House-passed revenue generating bills such as the Saipan casino gambling authorization bill and the electronic gaming bill.

The governor is poised to sign an up to $300 million pension obligation bond authorization bill that the House and Senate recently passed. Demapan said the measure was transmitted to the governor only on Wednesday.

"The administration has been an advocate of floating such a bond to help address the issue with the Retirement Fund and so the bill is now being reviewed and being readied for action," Demapan said.

The governor called for another leadership forum with the Legislature on Tuesday afternoon, and this is where most lawmakers said they hope to discuss and decide on key issues such as the direction for revenue-generating measures, projected revenues, and whether to sell or lease the Mariana House in Washington, D.C., among other things.

'No work hour cuts'

Under the tentative settlement deal, the government will be required to give additional funds to the Fund every year in order to meet the 75 percent obligation to the retirees, who will have to bear a 25 percent cut in their benefits.

Some Capital Hill employees said yesterday they worry that for the government to pump more money into the Fund, up to 16-hour work cuts would be implemented once again.

The press secretary said at this time, there is no discussion about work hour cuts.

"The administration is cognizant that many have already sacrificed so much during the two years that the government was on reduced work hours. At this point in time, the administration is prioritizing working with the Legislature to get going on revenue generating measures for the benefit of the Commonwealth," Demapan said.

If the government doesn't come through with its promised amount to be remitted to the Fund, a default judgment could be rendered against the government amounting to $779 million.

Demapan said the administration would not have agreed to settle if the terms were unfavorable.

"Right now, the governor is hopeful that as work progresses to finalize the settlement, the final product will be one that is conducive to all the parties involved," he said.

'Welcome development'

Demapan said with the settlement moving a step further to being finalized, this is certainly a welcome development.

"Governor Inos saw that it was important to engage in settlement negotiations instead of to keep going the very costly route of litigation. And so in good faith, Governor Inos wholly committed himself to participating in the negotiations during the three days at the District Court. The governor knows both sides of the coin as he is a retiree as well, so he wants nothing less than what is best for active employees, for retirees, and for the overall operations of the Commonwealth and its services to the people," he said.

Former Retirement Fund board of directors chair and now Commerce Secretary Sixto Igisomar said yesterday that having a settlement deal reduces uncertainties.

"They would at least understand and put some clarity to where we're heading and put some planning in place... hopefully that we all follow it [agreement]," he said.

Igisomar said this is no easy matter but reaching a settlement deal after all these years is a step in the right direction.

"Obviously the governor has his own solutions and I know that the retirees believe differently. But I understand the governor truly means well. for the betterment of the entire CNMI people and the retirees. It's not a very easy matter and I give kudos to the governor for making sure he coordinates these efforts with the Office of the Attorney General," he added.

25-percent pension cut

Rep. Christopher Leon Guerrero (Cov-Saipan) supports giving more money to the Fund as a result of the settlement deal and after years of failing to remit to the Fund, but the government also has to deal with other issues such as public health and public safety.

As a retiree, Leon Guerrero said he is concerned more about the impact of a 25-percent cut in pension on other retirees who are receiving only $10,000 or less in retirement benefits every year.

He hopes that the 25-percent cut will be done in a fair manner wherein those who are receiving way more than $10,000 in benefits a year, for example, will bear the full 25-percent cut, while those getting only $10,000 or less will receive a smaller cut.

More to be done

Acting House speaker Frank Dela Cruz (IR-Saipan), meanwhile, said there's a lot of work that still needs to be done after reaching a settlement agreement on the Fund, including finding ways to generate revenue so that more money will be remitted to the Fund.

He said he is also happy to hear that active Defined Benefit members of the Fund will finally be able to withdraw their contributions "once these details are hammered out with the District Court."

Dela Cruz said whatever is added to the projected revenue for 2014 should go toward the Fund.

"Definitely, the Retirement Fund for me is first and foremost priority. We have other priorities such as PSS and CHC but at this point in time, we want to ensure that the Fund stays afloat," he added.

Rep. Tony Sablan (IR-Saipan), chairman of the House Ways and Means Committee, said the budget bill could be easily revised to reflect any additional funding proposed for the Fund.

Senate President Ralph Torres (IR-Saipan) said he supports giving more to the Fund in the budget for 2014 but he pointed out that it is also critical that what the government "appropriates" for the Fund "actually goes or remitted" to the Fund.

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