“My concern is…why not the Department of Finance work out a [100 percent] payment schedule with the Retirement Fund?” said Manglona, R-Rota. “If you make a payment plan to restore [the pension] 100 percent you will get a lot of government employees retiring today.”
The senator estimates that about 50 or more government employees who are working for more than 20 years with the government may choose to retire from the service.
There are about 30 government employees who will retire and receive proportionate retirement payments, Manglona said.
Previously, the Senate passed legislation allowing the Retirement Fund to pay new retirees less than their full pension amounts.
Manglona said the full retirement payment will provide $2 million in savings “not only for this year” but also in the coming years.
Such savings will be possible if the government will not hire, or replace the retired government staff, he said.
“We hope not to continue hiring. We need to cut back drastically” on hiring people, he added.
Finance Secretary Eloy S. Inos earlier expressed concern about the need “to bring down the [government’s] expenditures to the identified resources” cited in the budget.
He said the administration’s priority is to cut government expenditures because they have not identified funding sources to cover the budget deficit.
He stated the department has to work on $153 million budget for fiscal year 2009. The government’s current budget amounts to $163.5 million.
In a recent meeting with administration officials in the Senate chamber, Manglona noted that employees who are already up for retirement are still staying on, causing the government to continue spending for their positions.
“I agree,” Inos said, saying he is having a problem communicating with the Retirement Fund about the issue.
Citing the government’s failure to remit its employer’s contributions, the Retirement Fund adopted a resolution to stop the processing of retirement applications for members who work for agencies with deficient employer contributions.
All government offices and agencies, except those that are autonomous, are deficient in their pension contributions because of the passage of a law allowing the CNMI government not to remit payments to the Retirement Fund in fiscal years 2006 and 2007.
The Fund has urged politicians to stop using the pension system to win votes as the program’s lifetime will be cut short if they continue tinkering with it.
