Fitial asks Finance to show source of COLA

The House leadership is asking the Department of Finance to show the source of funds used to pay off the retiree’s cost of living allowance.

House Speaker Benigno R. Fitial made the request in a letter dated Oct. 14, 2005 to Finance Secretary Fermin M. Atalig.

“This letter is to respectfully request a full accounting of the source of funds used to release the NMI Retirement Fund’s cost of living allowances, which were long overdue,” said Fitial.

The lawmaker also asked the Finance official to “identify the government funds used to pay for this Retirement Fund obligation.”

Gov. Juan N. Babauta authorized in early October the release of 2005 COLA amounting to $687,686. Atalig earlier said that the money would come from the General Fund. He said that after several years, it is the first time for the government to pay off the COLA from the General Fund.

COLA, which is now up at 2.7 percent, is given annually to retirees aged 55 years and older.

Fund administrator Karl Reyes said there are 1,303 retirees who are qualified to receive COLA this year.

The Fund has some 2,000 retiree members.

COLA is released together with the retirees’ pension every pay period.

Every pay period, the Fund releases $1.1 million for the retirees’ compensation or over $26 million a year.

The NMI Retirement Fund board withheld issuing the annual COLA to retirees until this month for lack of funding.

The Fund said that since 1998, it stopped receiving COLA remittance from the $2 million government appropriation through Public Law 8-31.

In prior years, the Fund said it used to tap the retirement contribution to pay off retirees’ COLA. This year, however, the Fund decided to hold it off until the government remits the appropriate funding.

COLA is usually given beginning January of each year.

Fund administrator Karl T. Reyes said recently that retirees will begin to receive their newly released COLA on Oct. 15.

Reyes said that the first nine payments or from January to May 15 COLA will be received on Oct. 15. On Oct. 30, retirees will get their COLA for May 30 to Sept. 30, 2005. The COLA for the rest of the year will be paid in the next pay periods.

The Fund initially asked Finance for the release of the 2005 COLA funding in February. It followed up on the request last May.

Meantime, the Fund said that P.L. 8-31, which was enacted in 1994, mandating the release of $2 million a year should be amended to keep up with the increase in the number of retirees.

There were only 300 retirees in 1994, the Fund said.

The law is specifically designed to pay off three items: retirees’ COLA, special annuity for the past governors and lieutenant governors, and life and health insurance programs.