TWO retirees have received notices of overpayment from the NMI Settlement Fund, which informed them that overtime pay was “improperly” included in their pension benefits and will be deducted, former Rep. Mario Taitano told Variety.
A retiree himself, Taitano said the two retirees’ annual pension will be reduced by more than $5,000 even though overtime hours were “factored into our retirement benefits as allowed by Public Law 8-13.”
Public Law 8-13 applies the U.S. Fair Labor Standards Act to the CNMI, pursuant to the Covenant, which entitles government employees to overtime pay, Taitano said.
In her letter to one of the two retirees, both of whom are related to Taitano, Settlement Fund Administrator Lilian M. Pangelinan said an audit of the retiree’s file reveals that the retiree received an overpayment of benefits.
She said when the retiree retired, the retiree’s benefits “were improperly computed to include accumulated overtime/compensatory hours as service credit contrary to 1 CMC Section 8333, as outlined in P.L. 8-24.”
Pangelinan provided the retiree a table showing the adjustments made in the retiree’s pension benefit.
From $27,659, which already reflects the 25% cut pursuant to the settlement agreement, the retiree’s pension benefit was reduced to $22,539.
She said the law requires the administrator to make appropriate adjustments and recover the overpaid amounts.
The Fund administrator also told the retiree that he may appeal the decision by filing a notice of review within 30 days from the date of the letter, which was June 8, 2021.
According to Taitano, there are other retirees who may have received the same letter and probably didn’t appeal the decision because they are off-island.
But he said other retirees and their surviving spouses may file a class action suit.
