House Bill 17-217, which is expected to appear on the session calendar this week, reduces from 90 to 70 percent the tax rebate of those earning not over $20,000 annually.
The rebate of those earning over $20,000 but not over $100,000 will reduced from $18,000 plus 70 percent to $14,000 plus 50 percent and those earning over $100,000 will be reduced from $74,000 plus 50 percent to $54 plus 30 percent.
In an interview yesterday, Deleon Guerrero, R-Saipan, said the Fund right now has about three years to live.
“If we don’t do anything and the Retirement Fund collapses, the government itself will also go bankrupt because the commonwealth will end up shouldering the liability to the pensioners,” he said.
The government owes the Fund close to $300 million.
Rep. Froilan C. Tenorio, Covennat-Saipan, during yesterday’s House leadership meeting, reiterated his desire to allocate the biggest chunk of the Saipan gambling revenue to the Retirement Fund.
House Bill 17-215, or the fiscal year 2012 budget, appropriates only $10 million to pay the defined benefit employer contribution to the Fund, which the pension agency said is not enough.
Deleon Guerrero said the revenue that will be realized from the enactment of H.B. 17-217 will be appropriated for the Retirement Fund.
Under his proposal, the reduction in rebate will take effect on Jan, 1, 2012 and will be in force for two years.
Deleon Guerrero said his measure will realize savings that can extend the government’s retirement program for at least five years instead of just three.
“I am asking employees, both in the private sector and the government, to share in this temporary sacrifice because we cannot afford to see the Fund collapsing,” he said.
