The government is now looking for additional money to pay the Fund at least 30 percent.
A former official said a “built-in” deficit accrues as long as the government’s employer contribution is less than the actuarial rate.
Without paying the full rate, the government will automatically incur a deficit for FY 2011.
The new budget law cannot be considered “balanced,” which violates the Constitution.
Rep. Eliceo D. Cabrera, R-Saipan, said the Legislature has to start working on revenue-generating measures in order to raise the additional $4.6 million needed to pay the Fund 30 percent.
Cabrera said they also need to raise $4.1 million for the group insurance renewal rate and $3.8 million to match the Medicaid funding the CNMI recently received.
During a status hearing last August, Judge Kenneth Govendo ordered the Department of Finance to remit retirement contributions at an employer rate of 30 percent starting Oct. 1, 2010.
Govendo said Northern Marianas College and the Public School System “shall also pay an employer contribution rate of 30 percent.”
The judge said the government’s obligation to the Retirement Fund had increased to $285.75 million from $231 million in April last year.
