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Only 2 agencies pay increased Fund rates
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Posted on Nov 18 2005
Only two agencies—the Commonwealth Utilities Corp. and Northern Marianas College—have complied with the payment of increased rate in employer’s contribution, according to the NMI Retirement Fund.
Fund administrator Karl T. Reyes said these two agencies have been paying their employer’s contribution at the new rate of 36.7 percent.
He said the Commonwealth Ports Authority, which initially complied with the new rate, has stopped making such payment.
“CPA stopped paying [the new rate]. Recently, they came to us asking whether they can get a refund,” said Reyes.
He said the ports authority paid at 36.7 percent thrice sometime in June and July.
The Fund announced its new rate in May this year. Following appeals from most government agencies, the Fund decided to delay the implementation until October 2005 or the start of fiscal year 2006.
Citing the lack of funding for the additional cost, most government offices refused to pay under the new rate.
The Fund used to charge the government 24 percent in its employer contribution.
The Legislature has not passed a budget for FY 2006.
Meantime, Reyes said that while the Fund is required to collect the needed money, it understands the government’s fiscal condition.
He said that under the current revenue stream of the government, “no government can pay up” the retirement contribution.
“How can you pay when 70 percent of your budget is for personnel salary, 24 percent for retirement, $3 million for health care? Where do you get the money for operations?” asked Reyes.
Earlier, the Fund admitted that its existing employer contribution rate of 36.7 percent is “killing” the government.”
Fund board chair Joseph Reyes said his goal is to lower the rate to 10 to 12 percent. To do this, the government’s unfunded liability with the Fund must be drastically reduced. Right now, this liability totals $526 million.
