THE Department of Finance on Tuesday remitted to the Settlement Fund $40 million in annual payment for 75% of the retirees’ pension benefits, and the $558,676.52 voluntary biweekly payment for 25% of the benefits.
Both are due on Sept. 30.
Finance Secretary David DLG Atalig provided Variety copies of remittance sheets for both the 75% annual payment and the 25% bi-weekly payment.
The 25% benefit payment is not required under the settlement agreement.
For the 25% biweekly benefit pension, the CNMI government paid the Settlement Fund $461,935.96 for the 2,165 retirees on Saipan; $57,378.63 for the 281 retirees on Rota; and $38,422.49 for the 183 retirees on Tinian.
The $40 million paid on Tuesday was the CNMI government’s total obligation this year to the Settlement Fund under the settlement agreement.
On Dec. 31, 2020, $6 million or 15% of the entire amount of the annual obligation was paid for the first quarter of the fiscal year; on March 31, 2021, $20 million was remitted for the second quarter; and on June 30, 2021, $28 million was remitted for the third quarter to reach the 70% payment.
Atalig said Gov. Ralph DLG Torres “has been adamant that we also pay the 25% to all our retirees to make them ‘whole’ and we do our best to find sources of funds to pay them.”
“It is one of his top priorities to do so,” Atalig added.
The CNMI government, he said, has been able to pay the 25% using the Community Disaster Loan proceeds that the government received from Federal Emergency Management Agency.
These funds can be used to replace local government resources and cover deficits incurred during a disaster. In this case, Atalig said, it was Super Typhoon Yutu that caused the CNMI government deficits in the last three years.
In 2009, retiree Betty Johnson sued the CNMI government for its failure to pay the amounts that it was required by law to pay to the NMI Retirement Fund since 2005.
Johnson said the Fund would run out of money by June 2014 and would no longer be able to pay retirement benefits.
In September 2013, the parties agreed to settle the lawsuit and the federal court approved a $779 million consent judgment in case the CNMI government failed to meet its obligations to the Settlement Fund.
The Settlement Fund was created by the federal court as part of the settlement between the CNMI government and retirees.
The CNMI government’s primary funding source to pay its obligation to the Settlement Fund and the 25% of the retirees’ pension were the business gross revenue tax and the license fee collected from Imperial Pacific International.
But the Commonwealth Casino Commission has suspended IPI’s casino license for failure to comply with certain requirements under its license agreement. IPI is also facing a number of lawsuits from vendors and former employees. Its casino was shut down in March 2020 with the onset of the Covid-19 global pandemic, and construction work at its hotel in Garapan remains suspended as ordered by the federal court.
David DLG Atalig
