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House cuts govt’s Fund contribution
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Posted on Apr 27 2008
The House of Representatives passed on Friday a bill reducing the government contribution rate to the NMI Retirement Fund from 18 percent to 11 percent.
The bill was approved by an overwhelming majority, with only Rep. Tina Sablan voting against it.
Earlier that day, the Legislature received a presentation from the Fund’s actuarial consultant, who said the government must contribute 37.39 percent of its total payroll to keep the pension program from going under.
As of Oct. 1, 2006, the Retirement Fund had unfunded liabilities of $514.46 million. This is because Fund only had assets of $472.7 million, while having accrued liability of $987.15 million.
Fund administrator Mark Aguon said that while the pension agency is against any contribution rate that is less than what is actuarially recommended, 11 percent “is something—it’s better than the zero percent that we are getting now.”
The central government has not paid contributions to the Fund since 2006.
Under the bill, half of the savings from the reduced contribution rate would go to the fuel expenses of the Commonwealth Utilities Corp. Funds would also be provided to the Public Utilities Commission for its start up costs and operating expenses for the current fiscal year. The governor may reprogram the balance.
The bill, cosponsored by Speaker Arnold I. Palacios and Rep. Heinz Hofschneider, also would grant the governor unlimited power to reprogram lapsed funds to cover the budget shortfall.
It would double government fees for driver’s license, vehicle registration, firearms license, fingerprinting, police report, safety stickers, copies of any public records from the Department of Public Safety, and marriage license.
Further, some $2.15 million in earmarked non-general fund revenue would be appropriated to CUC for its fuel payments.
CUC would be allowed to use up to 50 percent of the security deposit paid by residential customers, again so the utility can buy fuel. But CUC must return the security deposit funds within three years.
Rep. Ray N. Yumul said there is about $4.7 million in CUC’s security deposit account.
