‘Retirees punished for Fund’s errors’

The embattled NMI Retirement Fund may soon face lawsuits for its decision to require retirees to pay back overpayments arising from its own mistakes, including almost $93,000 for just one person, as well as for giving affected retirees only 30 days to appeal despite the fact that the Fund’s board could not function at this time because of a lack of quorum, retirees and officials said yesterday.

Among the affected retirees now asking the government for help is Antonio O. Kiyoshi, a retired police major since December 1998, who is facing the prospect of having his pension slashed by up to 50 percent biweekly to pay for an alleged overpayment.

“Why would they punish me for their own mistake? I will appeal it, but I will run out of time because technically I only have 20 days to appeal and there’s no board to begin with to address my appeal,” Kiyoshi told Saipan Tribune via a long distance call from Arizona last night.

Kiyoshi worked for the Department of Public Safety on Tinian and Saipan for 20 years. He was shot in the back in the line of duty. He is diabetic and his one eye is blind, which is why he was let go from his new job in Arizona a few years back and now relies on his Fund pension.

“I ask that they give me 60 to 90 days to appeal. I got the letter only a few days ago but it’s dated May 7. I also ask the Fund to not force to cut my check by up to 50 percent. That’s too much to bear,” he said.

Sen. Frank Cruz (R-Tinian) also said it is “too much” for the Fund to force retirees like Kiyoshi to pay back overpaid benefits when it was the Fund that made the mistake in the first place.

“Assuming that this $93,000 overpayment is accurate, why did it take them 12 years to initiate the audit and punish the retirees for it? It’s not their fault. I don’t think the Fund understands the serious impact this will have on retirees like Mr. Kiyoshi, who may be relying only on his pension check to pay his house, his car, medicine and other basic needs,” Cruz said.

Senate floor leader Pete Reyes (R-Saipan), in a separate interview, said he has heard of other retirees’ complaints similar to Kiyoshi and the Fund will have to be prepared for possible lawsuits because of this.

“It’s the Fund’s mistake. They just recently discovered errors in their computations and they’re now going after retirees. It’s wrong to demand them to return these money when it was the Fund’s fault,” Reyes said.

Reyes said this is something that the Legislature could address by, among other things, introducing a bill that would block or prevent the Fund from asking retirees to return supposed overpayments resulting from the Fund’s own mistakes.

“The Fund may be facing lawsuits because of this, and they have to prepare for it,” Reyes added.

Kiyoshi said a cut in his pension as a result of overpayment is already tough, and further cuts as a result of the Fund’s Chapter 11 bankruptcy filing will make matters worse. “God knows what this bankruptcy filing would do to our pensions,” he added.

Richard Villagomez, Fund administrator, said in his May 7 letter to Kiyoshi that due to the “considerable amount of benefit overpayment” he has received, the Fund will deduct the maximum allowable of 50 percent of his corrected semi-monthly pension beginning June 15, 2012, pay period until the overpayment is fully paid.

He said a Fund audit revealed that Kiyoshi was “inappropriately given service credit instead of vesting credit” on his accumulated overtime/compensation time hours.

“This has resulted in an overpayment of benefits made to you since your initial retirement in December 1998,” Villagomez told Kiyoshi.

Since this is an “adverse decision,” Kiyoshi has the right to appeal the decision to the board.

“If you decide to appeal.your appeal must be received by the Fund within 30 days from the date of this letter. If you do not appeal within the time specified, it will mean that you agree with our findings and decision and no further administrative appeals will be allowed,” Villagomez said in his letter.

The Commonwealth Retirees Association has yet to tackle this matter but is aware of such sentiments from some affected retirees, said CRA board director Diego Benavente, a former representative and lieutenant governor.

Sixto Igisomar, whose term as Fund board chair expired a few weeks ago, said yesterday that the audit initiated by the Fund while he was still with the board covered a handful of individuals and the amount of overpayment and underpayment was “substantial.”

“I believe these people affected should air their concerns with the current board and the administrator. However, without a board, they could direct their concerns to the administrator who has been given authority to deal with much of the issues before the Fund,” Igisomar said, pointing out that he is no longer a Fund board member.

In March this year, the Fund reported that it successfully collected $228,000 from its members who received overpayments and underpayments of benefits from February 2010 to February 2012.

It said $433,000 more could be potentially recouped once the internal audit is completed.

At the time, Igisomar as board trustee said that since the internal audit began more than a year ago, it has helped boost the Fund’s revenue collection following the discovery of improper payouts and refunds to members and beneficiaries.