THE CNMI government has paid a total of $14.9 million in interest to retirees who had opted out of the Defined Benefit or DB plan, the Settlement Fund said.
Sen. Edith Deleon Guerrero initially made her inquiry to the Department of Finance regarding the status of the interest due to active Settlement Fund members who terminated their membership in the DB plan pursuant to Public Law 17-82 as amended by P.L. 18-02.
But the information at the time was not available electronically in the Department of Finance, Acting Secretary Margaret Bertha Torres told the senator, so she told her to ask the Settlement Fund.
In her response to Deleon Guerrero on May 4, Settlement Fund Administrator Lilian Pangelinan mentioned the fiscal year 2014 single audit indicating that the CNMI government has paid $14.9 million in interest pursuant to P.L. 17-82 as amended by P.L. 18-02.
Signed by then-Gov. Benigno R. Fitial on Sept. 11, 2012, P.L. 17-82, or the CNMI Pension Reform Recovery Act, gave DB plan members an option to voluntarily terminate their membership in the DB plan, and participate in the U.S. Social Security system instead, without termination of employment or penalty.
The law also allowed the CNMI government to continue remitting 4% employer contribution to the Defined Contribution or DC plan unless the employee ceased to contribute employee share.
On March 11, 2013, then-Gov. Eloy S. Inos signed P.L. 18-02 amending the Pension Reform Recovery Act to require members who opted out of the DB plan to receive employee contributions with regular interest without penalty and without separating from government service.
P.L. 18-02 also allowed the CNMI government to continue to withhold and remit the employee’s portion to the employee’s DB plan account with respect to employees who did not opt out of the DB plan.
According to the audit report cited by Pangelinan, for the fiscal year that ended Sept. 30, 2014, the CNMI recorded payment of interest of $14.9 million to active members who terminated their DB plan membership.
In an interview on Thursday, Senator Deleon Guerrero said although the amount provided to her by Pangelinan was based on an FY 2014 single audit, it indicates that the interest due to the retirees had been paid out.
She now wants to find out whether the CNMI government has paid all the interest due to retirees.
