“The shortfall will be $8 million and this will mean significant budget cuts — 392 jobs will be lost,” Sen. Maria T. Pangelinan said on Friday.
“This makes austerity measures imperative. So where do we cut and who do we cut? Maybe we should ask the Retirement Fund,” she added.
Without austerity measures — workhour reductions and pay cuts — over 1,000 government employees will lose their jobs, said Pangelinan, D-Saipan and chairwoman of the Senate Fiscal Affairs Committee.
She noted that the Retirement Fund now wants to negotiate with the administration and the Legislature.
“They should have sat down with us from the very beginning without going through litigation which cost this government a lot of money. So now what is the court saying? That we should all sit down, but that’s what we’ve been saying all this time. So now we’re back to square one.”
The Retirement Fund, the senator said, opposed her testimony during the hearings.
“They didn’t want the Legislature to be involved but now they want us to sit down with them,” she added. “I’ll say it again. The Fund sued the administration and not the Legislature. Now the administration must come to the Legislature to discuss the impact of the ruling. Whether the governor will accept the ruling or file an appeal we need to adjust the distribution of expenditures because there will be a shortfall and that will mean cuts.”
According to Pangelinan, no one said that the government did not owe money to the Retirement Fund.
“They did not need to sue the government over this debt — the government is obligated to pay the Retirement Fund,” she said.
“We all want to address the issue. I am a Retirement Fund member and all of us worry about the system and those who depend on their pensions, but we must also protect crucial government services.”
The Retirement Fund, however, was “unreasonable,” she said.
“They refuse to retire eligible employees who work for delinquent agencies, but these employees are paying their contributions. The Fund also insists that they have no fault at all, but where is their transparency? Why can’t they disclose how much are they paying their money managers and their lawyers? How are they computing benefits?”
Asked if she believes that elected officials will agree to lay off over 300 government employees in an election year, Pangelinan replied: “Somebody must make that tough decision. This is not unique to the CNMI. The state of California is issuing IOUs to its employees for payroll; other state governments are also laying off people and cutting costs.”
In a separate interview, Speaker Arnold I Palacios, R-Saipan, said the current Retirement Fund board members are appointees of Gov. Benigno R. Fitial.
“In the beginning [the then-new board] wanted to negotiate not litigate, so for three years nothing happened,” Palacios said. “The government was not paying the Retirement Fund. But then the board chairman became a candidate for governor and suddenly they were pursuing the lawsuit.”
