Celina Babauta
SENATOR Celina R. Babauta is asking the NMI Settlement Fund to stop deducting overpayments from the retirees’ pension checks.
In her letter to Settlement Fund Trustee Joyce C.H. Tang on Monday, Babauta expressed her concern regarding the “potential unauthorized collection of overtime pay calculations from benefits received by the retirees and their eligible survivors.”
On Nov. 6, 2023, Settlement Fund Administrator Lilian M. Pangelinan informed the affected retirees that beginning with pay period ending Nov. 15, 2023, their benefits would be adjusted to reflect the correct amount. She provided them a table indicating the change in their benefit, from the current amount to the “correct benefit.”
Pangelinan cited the adverse decision letter that the former NMI Retirement Fund issued on May 7, 2012, notifying each retiree of the overpayment of benefits they had received over the years. For those who did not appeal the decision, the administrator said, “the findings in the letter are final and binding.”
According to the adverse decision issued 12 years ago, an internal audit revealed that retirees were “inappropriately given service credit instead of vesting credit on [their] accumulated overtime hours, in violation of Public Law 8-24 as amended by P.L. 13-60.”
P.L. 8-24 included overtime pay in the calculation of a retiree’s benefit. P.L. 13-60 repealed the OT pay provision.
Go to court
Babauta told Tang that the Settlement Fund must go to the CNMI court before making any deductions from the retirees’ benefits.
“As you are aware, the lawsuit (Johnson v Inos, et al.) filed by Ms. Betty Johnson, Plaintiff, against the Commonwealth of the Northern Mariana Islands … in 2009 resulted in a settlement agreement intended to fully resolve all disputes related to the CNMI’s failure to properly fund the retirement fund,” Babauta said.
The settlement agreement, as she understands it, Babauta said, “encompassed all potential claims, including those related to overtime pay and clearly outlined all agreed-upon compensations which included a revision of benefits for the Settlement Class while preserving their constitutional rights to accrued and unimpaired … benefits.”
“Therefore,” she added, “any additional deductions from retiree benefits, such as overtime collection, would require prior court approval from the court that oversaw the settlement.”
She said pursuant to the settlement agreement, specifically, Section 4.4, “if the trustee determines that the Settlement Fund is within thirty days of having a low balance, the trustee shall give notice of a low balance to the CNMI. The notice shall include a statement of the amount necessary to make bi-weekly payments to Settlement Class members in the amount of 75% of their full benefit payments.”
“If there is no published notice of a “low balance’ required by Section 4.4 of the settlement agreement then, a diminished retirement pension is unnecessary,” Babauta said.
“Therefore, I urge you to cease any unauthorized collection of overtime pay calculated from NMIRF retirees or their eligible survivors’ benefits. Any such actions should be brought before the court for approval to ensure adherence to the terms of the settlement and protects the rights of the Settlement Class. I look forward to a resolution that adheres to the terms of the settlement agreement,” the senator said.
