This will change the administration’s fiscal year 2012 budget submission, according to acting Gov. Eloy S. Inos.
The Fund’s board of trustees during its meeting on Rota last month approved a 60 percent employer contribution rate for the defined benefit plan beginning Oct. 1, 2012. That is 60 cents of every dollar on each government paycheck
Although he believes the 60 percent rate is not sustainable and definitely not within the reach of the fiscal year 2012 budget, Inos said it still needs to be changed “to take into account that particular funding need.”
He said the administration has proposed to appropriate a line-item amount of $10 million in trying to meet the government’s obligation to Fund.
Gov. Benigno R. Fitial said he believes this proposal is consistent with the government’s ongoing negotiations with the Fund.
The administration is also “strongly” urging the Legislature to quickly act on House Floor Leader George N. Camacho’s House Bill 17-99 which seeks to change the payment method for employer contribution.
H.B. 17-99, which will remove the percentage method of paying the government’s employer contribution, has been in the Senate since February.
The actuarially determined rate is 37.9 percent but the government is paying only 30 percent, Inos said.
The difference is considered “deficient employee contribution which the general fund is absorbing as part of the deficit,” he added.
This is why for FY 2012, the government no longer wants to pay its contributions based on a percentage rate.
The government owes the Fund over $250 million.
