Senate Bill 16-36 will allow the Retirement Fund to pay pension proportionate to his agency’s employer contribution.
According to Taisakan, the intent of the legislation may be politically justified, but may not satisfy the constitutional provision stating that membership in the retirement system is a contractual relationship and accrued benefits “shall neither be diminished nor impaired.”
In a letter to the House Committee on Health, Education and Welfare, he said the Legislature cannot “alter and/or do away with the contractual relationship that governs, protect and guaranteed members of the Fund from receiving their full retirement benefits upon retiring from government services.”
The mayor also opposes the proposed amendment that will offer applicants to receive fill retirement benefits retroactive to the date of their application.
“It will be difficult for the applicant’s employer to remit and retire all of its deficient contribution which include statutory interest and penalties within six months after the approval of the applicant’s application due to lack of funds or without any appropriation budgeted only for the purpose of meeting that obligation,” Taisakan said.
Although he acknowledge the bill’s “good intention” to help members of the Fund, Taisakan said “trying to circumvent [the Constitution] may not help new applicants to retire and receive their retirement benefits.”
It will also not help reduce the unfunded liability of the CNMI government, he added.
“The Legislature should accept its responsibility, and the challenge, however, difficult it may be,” he said.
The government, according to the mayor, should reserve a certain percentage of its identified revenue resources to meet its contributions and obligations to the Fund.
These funds, he added, “should not be reprogrammed and shall be under the disbursement authority of the secretary of Finance.”
“Consider tapping certain percentage of the revenues from public lands that are held in trust by the Marianas Public Land Trust,” the mayor said.
