Retirees meet to discuss retirement bills

Aware of the government’s plan to overhaul the retirement system, the Commonwealth Association of Retired Persons Inc. finally set a meeting last night to discuss their plan of action to protect their earned benefits.

“We’re meeting with our board,” said association president David Igitol Thursday.

He said the group’s officers are scheduled to discuss the two bills submitted by the Fitial administration—the Defined Benefit Plan Rescue and Reform Act of 2006 and the Defined Contribution Plan Act of 2006.

“We’ll make a unified position on these proposals,” Igitol said.

The NMI Retirement Fund is thinking of either filing a lawsuit against the government or filing for bankruptcy in view of the administration’s proposals, which require the writing off of $124 million outstanding retirement debts.

Fund administrator Karl T. Reyes has said that based on the Fund’s legal counsel’s advice, a lawsuit, if any, should be filed before the “writeoff” bill becomes law.

Reyes said that bankruptcy filing would be more complicated since it involves the entry of the federal government.

“If we declare bankruptcy, we close and the federal government comes in,” he said.

A retiree, who agreed to speak on condition of anonymity, said this scenario is scary.

“As a retiree, this plan scares me. I hope we won’t reach this point,” said.

Another retiree, meantime, said that he is confident about the government’s plan.

“I don’t believe the government would do things that would jeopardize us. That writeoff is not writeoff per se. I think they’re only delaying the payment,” said the retiree.

The proposed Defined Benefit Plan Rescue and Reform Act asks the Fund to write off a $124-million current unfunded liability, suspend employer’s contribution, and purchase $40 million revenue bonds to fund the Commonwealth Utilities Corp.

The second bill, meantime, will get rid of government unfunded liabilities since it would only deal with the actual contribution of members.

The administration said that passage of both bills, in addition to the Legislature’s approval of the fiscal year 2007 budget, are initial steps to address the government’s financial imbalance.

The administration has submitted a $193.5-million budget for FY 2007. This is $5 million lower than the current revised budget of $198.5 million and nearly $20 million less than the continuing resolution of $213 million.