‘Senate leadership supports commitment to pay 25% pension benefits’

Jude U. Hofschneider

Senate President Jude U. Hofschneider (R-Tinian) assured CNMI retirees yesterday that the Senate leadership supports the Torres administration’s continued commitment to pay retirees’ their additional 25% pension benefits.

Speaking at a radio press briefing, Hofschneider said the process is for the Legislature to come together and allow the continuation of payment of 25% pension benefits as long as they agree on a balanced budget for fiscal year 2023.

Fiscal year 2023 will start on Oct. 1, 2022.

The CNMI government is mandated to pay only up 75% pension benefits to retirees under the U.S. District Court for the NMI-approved settlement agreement. Gov. Ralph DLG Torres announced over the weekend that his administration will pay for the remaining 25% pension benefits, thus giving CNMI retirees 100% of their pensions. Toward this end, Torres said that $3.27 million—or $545,000 bi-weekly—will be remitted to the CNMI Settlement Fund to cover the first quarter of fiscal year 2023 for the period Oct. 1, 2022 to Dec. 31, 2022.

Hofschneider said yesterday that there was a discussion during the Senate session last week about payment for the 25% pension benefits when they voted for a House of Representatives’ concurrent resolution that approves the budget appropriation for fiscal year 2023.

Hofschneider said that beneath the concurrent resolution is also an obligation that they must fulfill for the retirees’ pension benefits.

He said there was an exchange of arguments during the Senate session between what they need to include in the concurrent resolution.

Referring to Sen. Paul A. Manglona’s (Ind-Rota) offer of a floor amendment to include $13 million in the concurrent resolution to pay the 25% pension for retirees, Hofschneider said it was a noble idea, but not necessarily represents the process by which the Senate should be taking.He said the process takes place during the budget deliberation between the House and the Senate.

Hofschneider said it has always been the objective of the members of the Legislature, especially the Senate leadership, to work toward fully funding the pensioners 75% benefits plus the 25% that the administration has committed to allocate.

He said in the Budgeting and Planning Act right now, the law authorizes Torres at least up to 25% reprogramming authority to fund needed programs and to ensure that the services of the public is not impeded.

“So underneath that we can also make it clear in the budget provisions to recognize that authority of the governor so that we can also…the Legislature can recognize that there is a need to fulfill the 25%,” the Senate president said.

He said in addition to what is already in the Budgeting and Planning Act, they are going to memorialize that in the budget for fiscal year 2023 so that the retirees can say that the Legislature is indeed committed not only for the first quarter of the fiscal year, but for the remainder of fiscal year 2023.

Hofschneider said approximately $102 million is allocated for the entire fiscal year for the general fund, based on the concurrent resolution’s statement on what’s available for appropriation right now based on what is projected. He said the $13 million that is needed to fulfill the 25% pension represents approximately 12% of the entire fiscal year 2023 proposed budget.

“So what jumps out now is that there may be that flexibility and authority in the law for the governor to ensure that past December 2022, there is that mechanism to completely fund [the pensions] for the next three quarters,” he said.

Hofschneider said it is important to commend the Torres administration’s continued commitment to the 25% pension, despite the discontinuation of the $15 million annual casino license fee, which was the original source of that funding, and that the administration has managed to continue that payment.

He said CNMI’s tourism industry is still trying to get back to its feet but, as an elected official from Tinian, he says the leadership of Tinian, along with the support of the administration, is forging way ahead in trying to contribute to the CNMI’s economic recovery.

He said there’s a lot of buzz on Tinian about its booming construction industry, overbooking of lodging, as well as lack of hotel rooms and car rentals.

“There’s a buzz that we’re excited about and we are very proud to say that we’re starting. I believe Tinian is in a position right now to kick start the economic recovery,” the Senate president said.