No retirement bill fix after House session

The House of Representatives yesterday held off action on a measure that will provide a grandfather clause on the 10-year retirement contribution required under a new law that has drawn protest from teachers on the island.

Legislators were concerned that the legislative proposal is unfair as many of those availing the retirement as provided in the old law have a three-year government service and yet receive more benefits than they actually contributed.

An amendment to the existing law passed earlier by the legislature has raised to 10 years the requirement to be eligible for the retirement, catching off guard some teachers recruited by the Public School System from the U.S. mainland who were lured by the package.

Rep. Frank Cepeda, author of House Bill 11-232, expressed dismay over the delay in the enactment of the measure despite appeals from PSS to grandfather those teachers who signed their employment contract hoping to retire in three years to avail of the benefits.

At least 10 teachers have been affected by the new law, according to records of the Retirement Fund office.

“I was assured by majority of the House members that they would support the bill,” Cepeda said in an interview after the House session. “I did my best and I hope they will expedite action to address concerns of the teachers.”

The bill, which has been sitting in the House for the last two months, is referred back to the Ways and Means committee pending review of the costs of paying the retirement benefits to these teachers.

Government employees contribute an average of $800 to $1,000 each year to the Retirement Fund, but teachers who used to be eligible under the three-year package receive a minimum benefit package of $6,000 — almost double of what they actually pay as their share.

Cepeda’s bill, however, aims to correct loophole in the retirement law to spare those who were here prior to the passage of the amendment, according to legislators.

PSS officials earlier had slammed the new retirement law as disincentive to their efforts to hire off-island teachers who used to be encouraged by the attractive CNMI retirement benefit.

The package in fact was included in the PSS recruitment but because of the change, many are expected to resign by June next year, according to education officials.