BOE: Allowing retirees to ‘double dip’ incentivizes early retirement

The Board of Education has cautioned against allowing retirees to re-enter the workforce without any negative consequence, saying this will create an atmosphere that will motivate government employees to retire early so they can “double dip.”

In a letter from BOE vice chair Janice Tenorio, the board expresses concern that Sen. Justo Quitugua’s (Ind-Saipan) Senate Legislative Initiative 20-01 not only would cost the CNMI government more but also would create a situation that encourages the early retirement of government employees, just to “go through the rehiring process again.”

SLI 20-01 seeks to amend the CNMI Constitution to allow retirees to rejoin the workforce as classroom teachers, doctors, nurses, and other medical professionals without losing their pension benefits for an unlimited time.

Right now, “double dipping”—getting paid a salary while also receiving a pension—is only allowed for at most two years. After that, retirees that rejoin the government workforce lose their retirement benefits as they are considered employed.

A retiree refers to someone who has at least 20 years of service with the government.

SLI 20-01 garnered unanimous support from the Senate in mid-July 2017.

According to Tenorio’s letter, not only should the Legislature first consider the salary and pay grades retirees are permitted to rejoin the work force, but also look at its indirect effect.

“We believe that allowing retirees to rejoin the workforce without suspending the receipt of their benefits might incentivize everyone working in government to simply retire at their 20-year mark,” said Tenorio, adding that the Public School System would lose teachers only to be hired as retirees.

Tenorio also pointed out that retirees retired for a reason, and their time once they return to the workforce may be short-lived.

“We would have a high turnover of teachers and administrators rejoining the system, just to retire again,” she said.

Retirees might be too expensive

Saipan Mayor David M. Apatang, who also submitted comments on SLI 20-01, suggested something other than a constitutional amendment.

“By that, we mean maybe we should…offer very competitive salaries that attract highly qualified teachers, nurses, doctors, and other professions in the medical field,” said Apatang, adding that should the voters approve SLI 20-01, it would “cost our government almost the same as offering very competitive salaries and benefits to non-pensioners.”

Apatang also pointed out that it makes little sense to amend the constitution to permit the recruitment of retirees to “take on jobs that we know require advanced training and education.”

Tenorio also brought up the costs associated with allowing retirees to double dip.

“If the initiative is meant to allow former retirees to enter the workforce at the highest level of the scale, we may create a situation where the central government and autonomous agencies cannot afford to pay them based on their experience,” she said.

For PSS, retirees would be placed at the “very top of the pay scale” due to their experience.

“This would mean that PSS’ budget for personnel would be spent on a few number of people to fill a small amount of vacancies,” said Tenorio, adding that PSS could hire more teachers for less money.

“This is not to say that we do not want to hire high quality and experienced teachers but, if we are forced to hire former retirees, we may end up filling fewer positions for more money.”

NMC: Fresh grads would compete with retirees

Northern Marianas College president Dr. Carmen Fernandez, who also submitted comments on SLI 20-01, pointed out that NMC wants to ensure that “[fresh graduates] are able to join the local labor force without having to compete for job opportunities against retirees.”

“There are a growing number of programs that are available and that are geared specifically to filling positions in the education and medical fields,” Fernandez wrote in her comments.

Some members of the Commonwealth Healthcare Corp. believe that allowing retirees to double dip indefinitely “may not be ideal.”

Of the six that submitted comments on SLI 20-01, only Rota Mayor Ephraim Atalig was in support. According to Atalig, should the retirees re-enter the CNMI workforce, it ensures that “dollars would stay in the CNMI.”

“The more we hire from the outside, the more money [leaks out] of the CNMI,” he said in his comments, adding that even if the government spends “billions on education and [the] training of our people,” the CNMI would continue to hire nonresidents.

“But, at least, passage of the bill would minimize the importation of nonresident workers,” said Atalig.

A violation

According to Settlement Fund trustee Joyce Tang, SLI 20-01 does not comport with the Settlement Agreement.

Because the initiative “attempts to change the benefits received by a retiree returning to government service in contravention [of Public Law 6-41, section 15, or the ‘double dipping’ statute],” the initiative would be in violation of the Settlement Agreement, she said.

“…Any legislation modifying the benefits of a class member is ineffective without the consent of the Settlement Fund and the NMI District Court’s approval,” wrote Tang, adding that if SLI 20-01 is passed into law, it would have no effect under the Settlement Agreement.

“The parties of the Settlement Agreement must comply with all laws and terms of the Settlement Agreement. For this reason, SLI 20-01 if passed, would violate the terms of the Settlement Agreement and the order approving the agreement,” said Tang.

For SLI 20-01 to take effect, at least three-fourths of both the House of Representatives and the Senate should vote for its passage. Following its passage, voters of the CNMI would then have to vote on it at the next regular election.

As of publication, the House JGO committee voted 3-0 to set SLI 20-01 aside for further discussion. Committee members John Paul Sablan (R-Saipan), Francisco Aguon (R-Saipan), Edwin Aldan (R-Tinian), and Jose Itibus (R-Saipan) were absent at the Nov. 1 meeting.

“We postpone further deliberations on the bill to seek [the] legal counsel’s advice on the merits of Ms. Joyce Tang’s concerns,” said committee chair Rep. Ivan Blanco (R-Saipan).

MD: Several commented on legislative initiative to allow retirees to double dip indefinitely.

KW: Sen. Justo Quitugua, Settlement Fund, Board of Education, PSS, CHCC, NMC, constitution, Saipan Mayor David M. Apatang, Rota Mayor Ephraim Atalig.