‘Ex-lawmaker must repay part of early retirement bonus’

The Superior Court has ruled that former congressman Thomas B. Pangelinan, upon assuming elected office, was mandated to repay the 30 percent early retirement bonus that he had received.

Associate Judge Ramona Villagomez Manglona said that, although the Early Retirement Bonus Program was repealed by Public Law 11-14, the repeal took effect on Jan. 18,2000, a little more than a week after Pangelinan took office.

“Therefore, on Jan. 10, 2000, Pangelinan was mandated to return the 30 percent bonus,” said Manglona in her order granting and denying in part Pangelinan’s and the NMI Retirement Fund’s cross-motions for summary judgment.

The judge said P.L. 6-41, which came into effect on Jan. 19, 1990, mandated that all government employees pay retirement contributions to the Fund.

Manglona noted that because Pangelinan came out of retirement to work for the CNMI, first as a legislator, and then as Department of Lands and Natural Resources secretary, he is mandated by law to pay retirement contributions.

The judge, however, also determined that the Fund owes Pangelinan retirement annuity payments for the 60 calendar days that he would have regularly received for each four years when he served as a lawmaker and also when he served as secretary for DLNR.

Manglona said Pangelinan is entitled to receive monetary damages in the amount equal to the annuity benefits that he would have regularly received at the time for each fiscal year prior to the time he completed 60 calendar days of work in each of those fiscal years falling between Jan. 10, 2000 and Jan. 13, 2002, the period he served as a legislator, and also between Feb. 11, 2002 and Feb. 18, 2004, the period he served as DLNR secretary.

Furthermore, the judge said, Pangelinan is awarded monetary damages in the amount equal to the annuity payments he would have received from Jan. 14, 2002 through Feb. 10, 2002, when he was simply retired from government service.

Damages may be calculated with accrued interest at 12 percent per annum pre-judgment, and shall accrue at 9 percent per annum post-judgment, said Manglona, who directed Pangelinan to submit to the court a statement of damages within 10 days.

Manglona favored the Fund on all other issues raised by Pangelinan in his lawsuit against the Fund.

Pangelinan sued the Fund and its administrator, Karl T. Reyes, for alleged illegal withholding of his retirement benefits, and for unlawful taking of property without due process, and breach of contract.

Pangelinan, through counsel Robert T. Torres, asked the court to order the payment of his retirement annuity for the period from January 2000 through February 2004 at $1,393 a month, including interest.

The plaintiff demanded for a re-calculation of his monthly retirement pension at the rate of $1,303. He sought a reimbursement of all his retirement contributions allegedly unlawfully taken or deducted from his salary as a legislator and as DLNR secretary, including interest.

Court records show that Pangelinan is a retired former employee of the CNMI government. Beginning in 1967, he was employed as a schoolteacher, then a school vice-principal, and finally a principal in the Public School System.

During his employment with PSS, Pangelinan contributed a percentage of his income to the Fund, starting in 1980.

In July 1995, Pangelinan retired at the age of 47 after working for more than 28 years. At that time he began receiving bi-weekly retirement benefits from the Fund.

Upon his retirement, the Fund unilaterally added an extra five years in its computation of Pangelinan’s years of credited service.

Pangelinan’s span of service thereafter totaled 33 years and six months of credited service, for the purpose of determining his benefits. The Fund also unilaterally issued to him an “early retirement bonus” equivalent to 30 percent of his annual salary at that time.

After retiring in 1995, Pangelinan was elected to the NMI Board of Education, where he served for four years. During his tenure with the Board of Education, Pangelinan did not draw a salary, but did receive a per diem stipend for each board meeting, and he continued to receive retirement benefits from the Fund.

Pangelinan was later elected to the 12th Legislature, a position that he held from January 2000 until January 2002.

In February 2002, Pangelinan was appointed by then Gov. Juan N. Babauta to serve as DLNR secretary, in which he served from February 2002 to February 2004.

Pangelinan re-retired on Feb. 18, 2004, after earning 32 years and six months of actual service, without counting the five years of credited service granted.

During his tenure as a legislator, and at all times thereafter until his second retirement, the Fund stopped issuing bi-weekly retirement benefit payments to Pangelinan.

The Fund required him to resume making contributions to the Fund during the period of his re-employment with the government.

The Fund initially made a deduction according to the schedule for a Class I member, and thereafter made a correction and used the 9 percent rate of a Class II member.

The Fund also required Pangelinan in 2000 to return the 30 percent “early retirement bonus” previously issued to him.

In his complaint, Pangelinan contended that the Fund should not have terminated his pension payments when he came out of retirement to work as a legislator in January 2002.

He said the Fund should not have required him to resume paying retirement contributions when he came out of retirement and that he should not have been required to return the 30 percent bonus he received.

The Fund, through assistant attorney general David Lochabay, asserted sovereign immunity from what it contends is a damages claim inappropriately brought as a complaint for declaratory relief.

Lochabay further argued that it was correct in withholding Pangelinan’s retirement benefits during his post-retirement periods of government employment and that it was correct to require the remission of plaintiff’s 30 percent retirement bonus and the resumption of contributions upon his return to work as a salaried legislator.

In her order issued on Wednesday, Manglona said the Fund is not entitled to sovereign immunity from a suit by a member for a breach of contract claim under the Commonwealth’s retirement system.

Manglona concluded that there is a contractual relationship between Pangelinan and the Fund, and under the Commonwealth Code, the plaintiff can pursue a breach of contract action against this government agency.

In his motion, Pangelinan contended that the constitutional prohibition against “double-dipping,” as expressly stated in the statute, applies only to “early retirees,” that he is not an early retiree, and that he should therefore have been allowed to “double-dip” when he served as a legislator and a department secretary.

The Fund argued that the statute mandated that it give Pangelinan the five additional years to his total service, and that when he received and accepted the benefit of the five additional years, he was constitutionally barred from “double-dipping.”

Manglona determined that the plaintiff retired in 1995 subject to the restrictions on double-dipping set forth in the Constitution when he received the five-year credit and attached benefits and failed to raise any objection within a reasonable time.

Manglona denied in part Pangelinan’s request for monetary damages equal to the total amount of annuity payment withheld by the Fund for the four years and nine days he served as an elected representative and as DLNR secretary.

With respect to plaintiff’s due process right claim, Manglona said, “the rights which Pangelinan imagines as his constitutionally protected property interests are simply not to be found in the constitutional or statutory provisions upon which he relies.”

“Pangelinan therefore cannot have been harmed by any lack of notice or opportunity to be heard,” the judge added.