House approves amendment to retirement laws

The House of Representatives yesterday passed two bills amending existing retirement laws, one seeking transfer of service credits between married persons employed in the government, and the other giving option to elected officials to receive either their pension or salary.

Under HB 12-109 sponsored by Rep. Dino M. Jones, chair of the House Committee on Judiciary and Government Operations, the NMI Retirement Fund will be mandated to allow the transfer of up to five years service credits between a married couple who are members of the agency.

All such transfers shall be calculated to represent the actual service value to the recipient, regardless of the amount of time transferred, according to the measure.

In its report endorsing the legislation, the JGO committee said the move would help improve family as it would allow one spouse to opt for early retirement without losing his or her benefits from the NMIRF.

It could also encourage government employees to seek jobs in the private sector sooner and thus boost the number of resident workers and lessen dependence by the CNMI to alien workforce, the report said.

“We have many well qualified employees working for the government who would be encouraged to move to the private sector if they had this new incentive,” the committee pointed out.

To safeguard resources of the NMIRF, the bill included a provision requiring that the value of service transferred be taken at a relative value to the person receiving the benefits.

“By doing this, we will preserve the fiscal integrity of the Retirement Fund, while allowing our working families more flexibility in determining just how long they wish to remain employed,” the committee said.

Fund Administrator Juan S. Torres has cautioned the Legislature in recent months against enacting legislation affecting the agency as its assets may be at risk with too much benefits given to retirees without actually paying their contributions.

HB 12-73 offered by Rep. Norman S. Palacios, on the other hand, has clarified provisions of existing law that allows elected officials to waive their compensation in exchange for continued payment of their pension annuity.

This clarification is long overdue as the ambiguities have affected the integrity of the program.

Under the proposal, elected officials may use their salaries for operational expenses, including education and community functions if they choose to receive retirement pension.

If one waives his or her pay as elected official, the pension annuity shall be treated as annual salary so that the additional three percent benefit for his retirement will be computed as part of that amount, the bill stated.

Both measures are now up for voting in the Senate.