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Pacific Islands Development Program, East-West Center

With Support From Center for Pacific Islands Studies, University of Hawai‘i

Senators Query Continued NMI Fund Deductions
List of employees who opted out reportedly unavailable

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, Nov. 9, 2012) – Northern Marianas Senators yesterday met with the Department of Finance secretary and the Retirement Fund legal counsel to express concern over the deductions being made from the paychecks of government employees who have already opted out of the defined benefit (DB) plan.

In a meeting with attorney Brad Huesman and Finance Secretary Larrisa Larson in the Senate chamber, Senate Vice President Jude U. Hofschneider, R-Tinian, Sens. Frank Q. Cruz, R-Tinian, and Juan M. Ayuyu, Ind.-Rota, said many government employees who have already opted out of the DB plan, are still seeing deductions taken out of their paychecks for DB contributions.

Larson confirmed that the deductions affect 190 government employees who have started contributing to Social Security.

She said Finance still does not know how many of these employees have decided to opt out of the DB plan because the Fund failed to send her office a list of those who no longer want to be part of the dying retirement system.

As a result, amounts are being deducted from the paychecks of these employees for both the DB plan and U.S. Social Security.

Larson said Finance has been asking the Fund for the list of employees so her department can stop deducting DB contributions from their paychecks.

She said the affected employees are from the executive branch and autonomous agencies.

"We don’t want to see the employees of the commonwealth suffering," she added.

"The money will be refunded to them, but we want to stop the deductions as quickly as possible."

Acting Fund administrator Lilian M. Pangelinan was not in the meeting, but in a letter, she told Hofschneider that the Fund "is currently functioning with only two-thirds of the staff it had just five months ago."

She said in addition to performing several duties, the few remaining employees of the Fund have also been "diligently" processing the applications of those who want to withdraw their retirement contributions.

"The dedicated employees work well into the evening and on weekends and holidays, to ensure that each application is processed correctly and expeditiously," Pangelinan said.

She said despite its reduced workforce, the Fund "has successfully approved and processed a substantial number of the applications filed to withdraw [contributions.]"

But Hofschneider said there have been delays in releasing the checks of those whose withdrawal applications have been cleared.

Huesman said there is no delay at all. "We are working toward getting those quickly as they come out," he added.

According to Pangelinan, 1,745 applications have been submitted and 20 percent of them have been fully reviewed.

Since Oct. 5, she said she has approved 295 and disapproved 22 applications. On Nov. 3, the Fund paid 93 withdrawal applicants. She said they have already disbursed $806,500 to employees who wanted their contributions back.

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