Inos: Modified HB 17-226 will allow withdrawal of leftovers

Lt. Gov. Eloy S. Inos is proposing a modified version of the vetoed House Bill 17-226 that would allow non-retired members to withdraw their contributions from the NMI Retirement Fund’s defined benefit plan, among other things, after a buyback into the U.S. Social Security system that could cost some $60 million in employee and employer contributions for five years or 20 quarters.

The amount of withdrawals, however, is not up to 50 percent of the contributions but whatever is left after a buyback into Social Security.

Inos, who described the vetoed legislation as “shortsighted” and “political grandstanding,” said even if HB 17-226 is overridden by the House and Senate, there is an automatic stay because of the Fund’s Chapter 11 bankruptcy filing.

“I do not know that any action that will be approved during the period of automatic stay will make that action effective upon the lifting of the stay,” Inos told Saipan Tribune in an interview at the Saipan Agriculture Fair in Susupe on Saturday.

Gov. Benigno R. Fitial vetoed HB 17-226 on Friday, but the bill’s author, Speaker Eli Cabrera (R-Saipan) told reporters he will push for an override of the veto.

Non-retired Fund members led by Joe Pangelinan said they will lobby the Legislature to override the veto. The conference committee version of HB 17-226 passed the House by a vote of 13-6 and the Senate, by 6-2, and not 7-0 as earlier reported.

Inos echoed the Fund’s position that the bill as it is currently worded will accelerate the Retirement Fund’s demise.

“I think that we can make it work…We would allow the withdrawal to take place if we can agree on a buyback,” Inos said, as he encourages all parties to rally behind the Social Security buyback.

Inos, who is leading the administration’s effort in addressing the Fund crisis, said when the Fitial administration asked the Legislature to recall HB 17-226, the goal was to work on another version and not to trash the whole legislation altogether.

He said he understands the push to have immediate access to members’ cash contribution but he believes the bill is shortsighted.

“We have cases wherein employees quit, had to resign to withdraw. They withdrew, they can’t come back to work. In fact, they’re still unemployed up to now. And they’re probably in the food stamp line. I don’t want that. I don’t want to see that. I want to be able to offer some safety net for these folks. That’s our responsibility in my view,” Inos said.

He asked, “Why don’t we just make it better to take care of the short-term concerns as well as long terms?”

On April 17, the Fund became the first public pension agency on American soil to seek bankruptcy protection.

Inos reiterated that he and Delegate Gregorio Kilili Sablan (Ind-MP) have been meeting to discuss legislation that will specifically include the CNMI in the definition of “state” that is allowed buyback.

“Either that or include the CNMI specifically for purposes of buyback,” he said.

Under Cabrera’s vetoed bill, active members of the Fund would be allowed to take back up to 50 percent of their employee contributions regardless of years of service and without penalty or the need for them to quit their job. The rest of their employee contributions will be rolled over to the Fund’s defined contribution plan.

But Fitial, in his two-page veto message, cited two main concerns with HB 17-226, including the preservation of legislative authority and increased benefits.

“I believe, in the near future, I will have the privilege of signing a substantially similar legislative enactment; however, at this time, I must, with regret, return this with veto. Notwithstanding this action, I and my administration stand ready to work with you on solutions,” Fitial had said.