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Pass Social Security bill ASAP-Fitial
»House pre-files bill; Senate says it will not conflict with amendments to Fund EO
A day before leaving for a two-week trip to the U.S. mainland, Gov. Benigno R. Fitial urged the Legislature on Monday to immediately pass his administration-drafted bill indicating the CNMI’s desire to transfer active government employees to the U.S. Social Security program even as lawmakers are still debating on the governor’s executive order placing the NMI Retirement Fund under a state of emergency.
The governor said the bill’s passage will effectively transfer members of the Fund’s defined benefit and defined contribution plans to the U.S. Social Security program.
Fitial’s plan is to implement the Social Security program effective Oct. 1, 2012.
“Therefore, your expeditious action on this matter is greatly appreciated,” Fitial told lawmakers.
The governor also said other pieces of legislation will be forthcoming for the Legislature’s action to “reform” the retirement fund plan “to protect the benefits of our retirees and to effectively transfer our active employees to the Social Security program.”
“We are also waiting for the final draft of what the administration said was the enhanced version of House Bill 17-226,” said Rep. Joseph Palacios (R-Saipan) yesterday.
While the process to transfer active government employees to Social Security requires many administrative steps, Fitial said that one necessary step “is for the CNMI to pass legislation expressing its intent to be included in the U.S. Social Security program followed by a certification by the governor to the Secretary of the Treasury of the United States of America that this legislation was adopted.”
Acting House speaker Felicidad Ogumoro (Cov-Saipan) pre-filed the administration bill late yesterday afternoon, a day after Fitial sent his final draft to the Legislature for action.
House floor leader George Camacho (Ind-Saipan) said a session may be held as early as Thursday morning for the formal introduction of House Bill 17-312.
HB 17-312’s title reads, “To express the desire of the [CNMI] to have the insurance system commonly known as ‘Social Security’ extended to the officers and employees of the Commonwealth government and its political subdivisions and instrumentalities.”
Fitial said the legislation is simple and straightforward, “yet needed to move forward with implementing the U.S. Social Security program for our government employees.”
Senate President Paul Manglona (Ind-Rota), in a separate interview yesterday, said the Senate supports transitioning active members to the U.S. Social Security program and this, he said, does not conflict with Senate amendments to the governor’s emergency declaration for the Fund.
Manglona said the Senate is mainly opposed to the abolition of the Retirement Fund board and its transfer to the Department of Finance, adding that doing so is like allowing the fox to guard a henhouse since the central government itself owes the pension agency over $320 million in unpaid employer contributions plus interest.
The House has since sat on the Senate resolution.
Fitial reiterated that the current program “is not sustainable” for all members.
The governor said the administration will maintain the current retirement plan for retirees, but will move all other members of the Fund’s defined benefit and defined contribution plans to the U.S. Social Security program.
U.S. P.L. 86-778 excluded the officers and employees of the government of Guam from participation in Social Security. This exclusion was extended to the CNMI government, HB 17-312 says in its findings. But it said private sector employees were not excluded.
The bill also says it is now beneficial for the welfare of CNMI residents that the government participates in Social Security.
“The government’s participation will reduce operating expenses of the government and help ensure a stable retirement for the people of the Commonwealth,” it adds.
Two weeks ago, the administration provided two draft pieces of legislation to the House leadership. One became HB 17-312, while the other one has yet to be finalized by the administration.
That second bill is referred to as the “CNMI Pension Recovery and Survival Act of 2012,” amending the Commonwealth Code pertaining to the defined contribution and defined benefit plans of the CNMI’s retirement system to allow for the transition to participation in the federal Social Security system.
Fitial placed the Fund under a state of emergency after a federal judge dismissed the Fund’s Chapter 11 bankruptcy petition. The administration wants the Fund to be placed under the Department of Finance mostly to disburse retirees’ pension, while active members are transitioned to the U.S. Social Security retirement system.
