Better early retirement program pushed

Another bill has been introduced that essentially backs the extension of the government’s early retirement program after this year.

Senate Bill 14-99, authored by Sen. Luis P. Crisostimo, aims “to facilitate a healthy turnover of government employees by encouraging early retirement.”

“This is best done by making the option of early retirement attractive, whereby continued employment after one becomes eligible to retire early will not yield a higher retirement benefit to the employee,” reads a portion of the bill.

Crisostimo introduced the measure on Sept. 28, 2005 even as House Bill 14-337, which also seeks to extend the early retirement program, was earlier introduced in the House and is now pending at the Senate.

Introduced by Rep. Arnold I. Palacios, the House bill wants to extend the retirement option, warning that its statutory demise this year would result in an exodus of eligible retiring employees.

Palacios said that Public Law 13-60 or the Retirement Integrity Assurance Act provides that the early retirement bonus would be applicable only up to this year.

He earlier cited that at the Northern Marianas College alone, the early retirement of employees this year costs some $250,000.

Palacios’ bill also aims to consolidate the Class 1 and Class 2 members of the Retirement Fund.

“We want the two groups to be paying the same rate and receiving the same benefits,” he said.

Right now, Class 1 or those have become members prior to 1989, pay 6.5 percent for retirement and Class 2 members pay 9 percent.

Palacios’ bill aims to encourage Class I members to retire upon completing 20 years of credited service. The current law provides for 25 years.

Meantime, Crisostimo’s proposal aims to increase the contribution rate of Class members to 10.5 percent of the salary earned.

It also provides that in no event shall the annual annuity exceed 75 percent of the average annual salary.

The Senate proposal says that early retirement benefits can be extended to any Class 1 member who is 52 years old and has a minimum of 10 years actual employment or any member who has achieved a minimum of 20 years of vesting service.

Crisostimo’s bill provides that 30 percent of the early retirement bonus is given beginning Jan. 1, 2006 to any government employee who elects to take early retirement. The bonus shall be paid by the employing agency upon retirement.