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PSS paid only 24% retirement contribution
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Posted on Oct 21 2005
The Public School System paid only 24 percent in retirement contribution, rather than the current rate of 36.7 percent, according to Fund administrator Karl T. Reyes yesterday.
“PSS has already paid but it’s the old regular rate of 24 percent,” said Reyes.
He said three agencies have complied with the new rate.
These include the financially distressed Commonwealth Utilities Corp. and Northern Marianas College.
Reyes said Commonwealth Ports Authority is using its previously paid contribution under the new rate.
Other agencies, he said, including the central government are expected to settle their obligations by today or until Tuesday next week.
“We’ll be waiting for their payment,” said the Fund administrator.
The PSS payment came even as the Legislature recently passed a bill granting the agency a five-year reprieve from the 12 percent contribution rate increase.
The Fund raised the contribution rate from 24 percent to 36.7 percent effective this month.
The Fund had strongly opposed the PSS bill saying it is unfair and discriminatory.
The Fund said that giving PSS a special consideration would be “hurting thousands of people in the long run.”
PSS earlier reasoned that it should not be “penalized” for the additional rate because it has been paying its obligations to the Fund on time.
The PSS also said that complying to the new regulation would negatively affect its funding for certain programs.
The Fund said that PSS pays some $200,000 in employer’s contribution per schedule. It said the rate increase is needed for the survival of the retirement system.
The Fund said that the rate should have actually been raised to 39.4 percent beginning FY 2003 as recommended in the actuarial study but the board suspended such implementation.
The Fund’s unfunded liability totals $526 million. Its assets total over $400 million.
