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‘Let full House decide on Fund withdrawals bill’
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Posted on Nov 15 2011
By Haidee V. Eugenio
Reporter
Reporter
A committee that reviewed a bill allowing non-retired members of the NMI Retirement Fund to withdraw their contributions from the pension agency without severance of employment or penalties has recommended that the full membership of the House decide on the legislation.
The Committee on Health and Welfare, chaired by Rep. Sylvester Iguel (Cov-Saipan), said yesterday that the panel sees both potential benefits and possible adverse effects if House Bill 17-226 is enacted.
“As a result, the members of the committee find it reasonable and necessary that the full membership of the House participate in deciding what action to take on the measure,” the committee said in its report.
HB 17-226, introduced by Speaker Eli Cabrera (R-Saipan) on Sept. 21, may be acted on during today’s session, along with a new House bill seeking to legalize casino gambling on Saipan.
Iguel’s panel said the enactment of HB 17-226 may help the CNMI government by authorizing qualified government employees to withdraw their contributions from the Fund, “thus decreasing the government’s financial obligation to the pension fund.”
The committee, in its four-page Nov. 14 report, said while the benefits of the bill are far reaching, its enactment into law may shorten the “already short lifespan of the Retirement Fund, prompting strong opposition of its passage by the NMI Retirement Fund.”
Fund administrator Richard Villagomez, in a Sept. 26 letter to the speaker, said the bill has “ambiguities and problems” that need to be rectified.
The Fund said the bill will allow 2,996 active employee members to withdraw their employee contributions, and at the same time about 2,940 members receiving benefits as retirees, surviving spouses and surviving children will be left with only a little over $175 million to support their accrued benefits.
The annual cost for benefits alone in 2009 was over $63 million, a figure that’s a little higher as others retire or refund.
“Without current funding support for those that are retired and their surviving spouses and children, the Fund will definitely run out of funds to make payments in less than three years,” Villagomez said.
