Judge orders payment of 25 pct pension to retirees

Acting governor Victor B. Hocog, center, emerges from Horiguchi Building with Senate President Francisco Borja (Ind-Tinian) and House Speaker Ralph Demapan (R-Saipan) after Friday’s hearing on the issue of payments of 25 percent pension benefits to retirees. (Ferdie de la Torre)

U.S. District Court for the NMI designated Judge Frances Tydingco-Gatewood ordered Settlement Fund Trustee Joyce C. H. Tang and Settlement Fund administrator Lillian Pangelinan on Friday to process the 25 percent pension payments to retirees that were due last Feb. 12.

Tydingco-Gatewood issued the order for payments after hearing from Tang, deputy attorney general Lillian Tenorio, and acting governor Victor B. Hocog that the concerns that prevented the disbursement of the 25 percent pension checks has been resolved with Hocog’s signing of three emergency measures into law late Thursday afternoon.

The Settlement Fund last Feb. 12 returned to the Department of Finance the check intended for payments of the 25 percent pension. As a result, over 3,000 retirees did not get their checks.

At a video teleconference hearing on Friday, Finance Secretary Larrisa Larson informed the court that the money is still with the Settlement Fund because they did not cash the check.

Tydingco-Gatewood said a long-term solution for the Settlement Fund has to be addressed now.

Tydingco-Gatewood ordered Hocog to form a working group with the Legislature and Settlement Fund for long-term planning.

Hocog said he is amenable to the judge’s order and that he is happy to form such working group.

Hocog then asked the court if the 25 percent pension payments could be processed that day, Friday.

Settlement Fund Trustee Tang said they could do that processing if the hearing is adjourned soon.

Asked by the judge if they want to speak, Senate President Franciso Borja (Ind-Tinian) and House Speaker Raphael Demapan (R-Saipan) refused. This prompted the judge to adjourn the hearing.

Aside from Hocog, Borja and, Demapan, among those present in court were House minority leader Rep. Ramon Tebuteb (Ind-Saipan), Settlement Fund administrator Lillian Pangelinan, and Retirees Association chair Larry Cabrera.

The lawyers present were deputy attorney general Lillian Tenorio, assistant attorney general David Lochabay, Senate counsel Jose Bermudes, House counsel John Cool, Betty Johnson and class counsel Robert Hatch.

Tang discussed Hocog’s signing into law Public Law 19-35, PL 19-36, and Saipan Local Law 19-12.

The signing of three public laws provides, among others, $1.8 million to the Department of Finance to pay the retirees, removes any doubt that the governor has the authority to reprogram Executive Branch funds for these pension payments, and allows taxes earmarked to the Retirement Fund to be also be used for these pension payments.

Tang said under P.L.19-35, there was an added definition of the language for public purpose that needs clarification.

Tang said her concern is how the 75 percent payment be impacted.

Tang said if the measure only resolves fiscal year 2016, it’s not a long-term solution, but a short-term solution.

On P.L. 19-37, Tang said this gives the Finance secretary authority to pay 25 percent.

Tang said their position is to protect the 75 percent.

Tang also disclosed that for this second quarter of Fiscal Year 2016, the government paid $2.5 million in minimum annual payments.

She said to date the government paid a total of $2.7 million, leaving a balance of $7.75 million to be paid in the next six weeks.

She said as of that day, Friday, she learned that $1 million will be paid to the Settlement Fund from the government.

Tang thanked Hocog and lawmakers for their quick actions as she underscored the importance to have continuing communications.

Tang said there should be a long-term solution to continue the payments for the 25 percent if that’s the intent of the government.

Tang also asked on the viability of taxes collected under the casino law for earmarking for the 75 percent and 25 percent pension payments.

Tydingco-Gatewood said it is important for the governor and lawmakers to work with Tang.

The judge said she is not sure if Gov. Ralph DLG Torres is just too busy because he just got on board.

Tydingco-Gatewood said he is appreciative to Hocog, who appeared in court at the recent emergency meeting and on Friday’s hearing.

She said it is her hope that Hocog will continue to work with Tang as it is very important that all affected 3,000 retirees and families should receive their payments on time.

The judge said she does not want the retirees to be in panic mode situation as what had just happened.

Tydingco-Gatewood noted that so far there have been smooth payments to the retirees until recently.

Tydingco-Gatewood said Tang has a fiduciary duty to ensure payment of 75 percent.

After Friday’s hearing, the judge said she is hoping that there will be no more emergency hearings.

Tydingco-Gatewood said if no proper planning for source of funding, the funding for payments for the 75 percent will be depleted by 2019.

The judge pointed out that there must be a long-term planning for the 75 percent and 25 percent.

“That should be the next phase to move forward,” Tydingco-Gatewood said.

Deputy AG Tenorio explained fully the three measures that Hocog signed into law and answered Tang’s concerns.

Tang was satisfied with Tenorio’s explanations. Tydingo-Gatewood also praised Tenorio and asked that she should continue participating in this case.

Tydingco-Gatewood ordered Finance Secretary Larson to continue to work on weekly basis with Tang and Settlement Fund administrator Pangelinan.

Tang said the 25 percent for 2016 is resolved, but going forward or beyond FY 2016 needs further discussions.

Hocog said he tried his best to address Tang’s concerns and this translates with the solution for the payment of 25 percent.

“I assure the court that the 25 percent is also a priority,” Hocog said, adding that the government will not breach the settlement agreement for the payments for 75 percent.

Hocog said they will uphold the court’s order to continue having open communication with Tang as the government addresses both 75 percent and 25 percent payments to realize the 100 percent.

He assured that the government will treat as commitment—the 75 percent along with the 25 percent.

Tydingco-Gatewood thanked Hocog for his seriousness and professionalism in handling the situation.