Palacios says payment of retirees’ 25% pension will be suspended if… | Local News
Gov. Arnold I. Palacios has disclosed that the administration will suspend the voluntary payment of the 25% pension benefits for all government retirees if the Senate will not pass by April 15, 2024 a bill will appropriate $5.2 million of the dividends collected by the Commonwealth Economic Development Authority from the Commonwealth Utilities Corp. for such payment.
Palacios said in an interview on Wednesday that he, however, is confident that the Senate will act on the legislation because when they had a meeting recently discussing the payment of 25% pension, Senate President Edith E. DeLeon Guerrero (D-Saipan), and Sens. Paul A. Manglona (Ind-Rota), Corina L. Magofna (Ind-Saipan), Celina R. Babauta (D-Saipan), and Jude U. Hofschneider (R-Tinian) were present.
“So I know that they understand and I appreciate that most, if not all of the Senate members also know the urgency of this if we are to continue to accommodate the 25%,” he said, adding that he is hoping that the Senate will act expediently on the legislation.
The House of Representatives fast-tracked the passage last March 28 of the legislation, House Bill 23-104, House Draft 1, which was introduced on that same day by Rep. Jonathan T. Attao (Ind-Saipan).
Attao stated shortly before the legislation was unanimously voted on, that if the Legislature does not act on it, 25% of retirees’ pension will be reduced, if not suspended, by April 15, 2024.
Attao said recently, both the House and Senate met with the administration, which informed them that the CNMI is in bad financial straits.
He said a lot of the retirees’ 25% pension are being paid out using the reprogramming authority of the administration, but unfortunately, the funds are being depleted.
Since 2014, the CNMI government has been making the 25% voluntary benefit payment to the NMI Settlement Fund on top of its 75% minimum annual payments pursuant to a settlement agreement in a class action against the NMI Retirement Fund and the CNMI government.
Palacios said during the interview on Wednesday that Attao’s bill is a solution, but not a permanent one.
Palacios said during their recent leadership meeting with some members of the House and Senate, they laid out some of the issues that the government is facing and that one of them is the possibility of suspending the payment of the retirees’ 25% pension.
The governor said the payment of 25% is not statutorily required.
He said they also discussed about revisiting all government departments and cut back on personnel costs and even expenses, and what would it take across the board cut for every branch of the government.
Palacios said Attao is very concerned particularly for retirees and to his credit, he came up with a solution to at least address the 25% pension issue up to the end of this fiscal year so that the retirees are taken care of for the next five to six months.
He said Attao’s bill is not a permanent solution, as it’s always going to be something that they have to take a look at all the time when the revenues or the resources are not available.
Palacios said the administration has made a commitment to the extent that they can continue to find funds for the 25%, they will.
He said for 18 months that would have been the most convenient thing to do is for them to just cut that 25% pension away as they are talking about $12.5 million to $13 million in savings.
Palacios said he and Lt. Gov. David M. Apatang have compassion to folks that have retired and especially those that cannot go back into the workforce as that would put a lot of pressure on them because it’s their basically fixed income.
He said he wholeheartedly supports the initiative presented by Attao.
“If anything, at least through the fiscal year we will see, you know, where the economy takes us in the next fiscal year. But he’s concern is everybody’s concern. We’ll take a look at it,” the governor said.
Palacios disclosed that if something doesn’t happen soon, he actually had a final draft of a letter to NMI Settlement Fund trustee Joyce C. H. Tang, telling her they will not probably be able to pay the 25% if the legislation does not pass.
“I don’t think we are going to be able to fund it. So therefore, we’re [going to] have to probably suspend it probably April 30, or first of May,” he said.
Palacios said his initial letter was ready to be sent to trustee Chang, but when the House came up with a solution, through Attao’s bill, he kind of held back the letter.
He said unfortunately, he has to subsequently submit the letter to Chang to advise her that they are going to suspend the 25% payment if nothing happens between now and April 15.
Palacios said the $5.2 million will give the administration up to at least late August or September for payment of the 25% pension.
The governor said hopefully between now and then, they will be able to reconsider some of the legislations that are already in the Senate for revenues, or some other members of the House can come up with additional initiative to generate revenues in this economy.
Palacios said the administration is trying its best to make sure that all the tax collection is moving forward strongly.
He said they are also making sure that all infrastructure projects move forward expediently so that they can generate revenues that come with that.
The governor said he hopes that they’re done with the Beach Road project several years ago, but it was not, as it was last year that they initiated for that getting it done.
Palacios also noted that the infrastructure and activities from all the Community Development Block Grant-Disaster Recovery and other disaster projects, including those for the Northern Marianas College, will have impact on the economy.
Palacios said Tinian infrastructure projects will probably begin to bear fruits in the very near future.
“So, we’re hoping to those activities will generate revenues so that things will begin to stabilize,” he said.
