Wednesday, August 11, 2010

Community Education--House Legislative Initiative 16-13

On the November ballot, voters in the CNMI will be asked to consider three proposed amendments to the CNMI Constitution. Here is information on one of them: House Legislative Initiative 16-13.

HLI 16-13

This legislative initiative amends Article III, section 20 of the CNMI Constitution by adding a new subsection (c). The new provision prohibits the CNMI Legislature from increasing benefits to members of the Retirement Fund unless the CNMI government has satisfied its obligations to the Fund under the law or unless the Retirement System is fully funded.

PROS: The provision attempts to prevent further harm to the Retirement Fund from the pressure of providing greater benefits to its members. It prevents the Legislature from an outright increase of benefit payouts.

CONS: The protection is weak. There is no protection against increasing costs to the Fund that could occur from other means like raising salaries of its staff or from incurring other obligations that could run the Fund into the ground. It is also unclear how broad the scope of the prohibition is—for example does it encompass rule changes on double-dipping; would it protect against full benefits for Austerity Friday employees? It leaves room for debate and disagreement on whether the conditions for overcoming the protection have been met—if the CNMI and the NMIRF disagree on whether all obligations have been paid, whose opinion controls? If the CNMI goes bankrupt and its obligation to the Fund is discharged, has it satisfied its obligation? If the CNMI pays all of its obligation but that is not enough to fully fund the system, can benefits still be raised?

SUMMARY: The Legislative Initiative amends the CNMI Constitution to provide some protection to the Retirement Fund that presently does not exist. That protection may not be strong enough to address the many and varied problems described in the initiative, but it is more than presently exists.

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