Govt to pay its Fund contribution next week

Pension checks for retirees will be released this month as the needed money would be coming by next week, said Finance Secretary Fermin M. Atalig.

Atalig said yesterday that the central government would be paying its employer contribution amounting to $850,000 next week.

“We will pay next week. We paid them $300,000 last week. I hope to pay another employer contribution of $850,000 next week,” he said.

The NMI Retirement Fund earlier expressed concerns over a potential lack of money to give the retirees for the last pension payment this year, saying that no government office has remitted any contribution yet for the month.

Fund administrator Karl T. Reyes said that as of Friday last week, not a single government department or agency has paid its employer contribution, which the Fund uses to pay the pension obligation to retirees.

“Without this, we won’t be able to pay for the Dec. 30 pension,” said Reyes.

He said the Fund needs $2.2 million to settle its obligations for the retirees on Dec. 30.

Earlier this month, Reyes said that the central government has been behind in employer’s contribution for five pay periods amounting to some $4.2 million.

Reyes said the government paid $1.2 million on Nov. 29 but this has not settled the pay periods covering September and October and one pay period in December.

Reyes confirmed that Finance paid $300,000 last week and another $300,000 the previous week.

The government usually pays $835,000 to $850,000 in employer contribution per pay period.

The government is required to shoulder 24 percent of the retirement contributions for about 5,000 employees.

The 24 percent rate was raised by the Fund to 36.7 percent effective October this year in view of the government’s huge debt, but only two government agencies have been able to comply with the new policy as others cite lack of funding.

As of May this year, the government’s total arrears in retirement contribution reached $80 million, reflecting the central government’s unpaid employer’s contribution from December 2001 to present.

The Fund said that payments made by the government are credited to the oldest accounts—covering fiscal years 1998 to 2001.

Finance authorities said that payments to the Fund were current until June 1998.

The Fund said that the government ceased payments from August 1999 until September 2001.

The Fund said that total employer’s contribution paid from October 2001 to September 2005 amounted to $56.3 million.