PSS is supposed to pay 36.7 percent rate in employer’s contribution, but a law allows it to pay 11 percent.
The Fund, however, is charging PSS about $5,000 in interest and penalty each month for the difference between the two rates.
Guerrero said they have invited education officials to the Fund’s next meeting where they are expected to make a presentation on the employer’s contribution rate.
“The waiver really is not something that is negotiable,” he said. “It is a matter of law and there’s no way we can accommodate such a request because the Fund’s trustees don’t have that discretion.”
PSS is not the only government agency that requested for a waiver, he said.
Approving a waiver will set a precedent that will greatly impact the Fund’s lifeline, Guerrero said.
PSS is requesting for a waiver due to lack of funds and to ensure that its retiring employees will not be affected.
The Fund does not process the retirement papers of employees whose agencies are delinquent in remitting employer’s contributions to the Fund.
Guerrero said amending the law is the only way they can change their present guidelines.
But PSS can always consider transferring its employees to the new retirement plan as a way to address its concern, he added.
“The only way we can assist PSS is to go back and amend the law to change the benefits. If they want to pay a lower fee, then we should restructure the benefit plan,” he added.
Guerrero said the difference between the rate set by an actuarial study, 36.7 percent, and the rate set by law, 11 percent, will increase the already “big liability” of the CNMI government to the Fund.
