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Retirement board defines scope of 1998 pension law By MAR-VIC CAGURANGAN Staff Reporter
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Posted on Oct 25 1999
Civil servants who joined the government prior to the enactment of the new pension law are exempted from the new policy that requires a minimum of 10 years in government service to be eligible for retirement, the NMI Retirement Fund’s Board of Trustees ruled last week.
The retirement board defined the scope of Public Law 11-9 in response to the appeal filed by at least 50 claimants who were employed before April 16, 1998, the date when the new pension law went into effect.
PL 11-9, which amended a previous law, has raised the length of service requirement from three to 10 years to be eligible for retirement. It covers any Class I employee who is at least 62 years old, and was hired not earlier than May 7, 1989.
The claimants, led by the labor department’s former hearing officer Linn Asper, had protested the Fund Administrator’s position that “the vesting 10 year requirement” of PL 11-9 applies to all employees “who have not yet acquired the three years of vesting service.”
The board reversed the administrator’s ruling, saying that “employees who were contributing members of the Fund when Public Law 11-9 became effective fall within the protection of the savings clause because, at the minimum those members had existing contract rights established by the statute and protected by the NMI constitution.”
The board said these employees relied on the original three-year vesting requirement when they accepted jobs in the government.
The government is “contractually bound” to honor its obligation to provide a pension “without any further modifications or decreases in overall benefit levels,” the board added.
“The CNMI’s pension case law is still in its infancy,” the board said.
The CNMI courts have not addressed a similar issue, but the board said it adheres to a modern trend among state tribunals, which is inclined “to protect pension rights.”
“While this decision may involve an additional financial burden on the government,” the board said, “it is a reasonable resolution of the issue, harmonizing statutory rights and limitations with the NMI’s constitution.”
