Hofschneider: Finance figures show enough money for retirees' 25% benefit

Senate Fiscal Affairs Committee chair Sen. Jude U. Hofschneider said that financial data provided by the Department of Finance shows there is sufficient money available to continue retirees' 25% supplemental pension benefit through the remainder of fiscal year 2026, unless the administration has not been fully transparent with the information it has shared with lawmakers.

“Based on the exercise that we did for fiscal year 2026, sufficiently provided for the 25% for the remainder of the fiscal year,” Hofschneider told Marianas Press in an interview last June 10.

He said legislative fiscal analysts, working with figures supplied by the Department of Finance, determined that approximately $11.9 million is needed to fund the benefit through Sept. 30 and that available resources exceed that amount.

“As a matter of fact, based on the numbers that we received from the Department of Finance and all the work that's been done both for the House and the Senate, the amount needed for fiscal year 2026 for the 25% is about $11.9 million,” Hofschneider said. “We have more than sufficient enough funds to address the fiscal year for the 25% for the rest of the fiscal year.”

The senator from Tinian said current figures available to lawmakers indicate roughly $15.7 million could be used toward the benefit, including previously appropriated funds, excess payments related to the minimum annual payment, federal grant funds, and the $2.1-million funding proposal now pending before the Legislature.

Asked why the administration is warning that the benefit may end after July, Hofschneider said that is a question administration officials should answer.

“That's something that you need to ask them,” he said.

Hofschneider said lawmakers have identified about $15.7 million in available resources while the estimated need is about $11.9 million.

“We have basically $15.7 million right now, to date,” he said. “We only need $11.9 [million], $12 million.”

He argued that the focus should instead be on how the government will fund retirement obligations in fiscal year 2027.

“I think the message should be, what are we doing for fiscal year 2027?” Hofschneider said. “Instead of trying to deploy a, quote-unquote, a scare tactic to the pensioners, that it's going to run out by July 29. I think that's very irresponsible, to say the least.”

The senator also disputed suggestions that immediate passage of House Bill 24-84 is necessary to keep the payments flowing through the end of the fiscal year.

“I respectfully disagree with the notion of, we need the $2.1 million right away, because otherwise we don't get paid by July 2026,” he said. “There's sufficient authorization, there's sufficient amount of figures that have been provided from the Department of Finance to the Senate to say that there's enough to satisfy for fiscal year 2026.”

Rep. Blas Jonathan “BJ” Attao, however, called on the Senate to pass House Bill 24-84, which would appropriate additional funds for retiree benefits and the Public School System.

“House Bill 24-84, legislation that would protect retiree pension benefits and provide critical funding for the Commonwealth of the Northern Mariana Islands, has remained pending before the Senate Fiscal Affairs Committee since January,” Attao said in a statement.

“We respectfully urge the Senate to take prompt action and pass House Bill 24-84 without further delay. Timely passage of this legislation will provide much-needed certainty and peace of mind to our retirees, who have earned these benefits through their commitment and service to our government and communities.”

The differing views come after the administration informed the Settlement Fund last May 27 that it would no longer fund the 25% supplemental pension benefit beyond the July 31, 2026 pay period.

In a notice released earlier this week, the Settlement Fund said the 25% benefit payments have been fully subsidized by the CNMI government and are not required under the Johnson v. Inos consent decree. The notice also noted that House Bill 24-84 would provide $2.1 million to continue the payments, but said the fund has no information on whether the measure will ultimately be enacted.

Hofschneider sought to reassure retirees that lawmakers have identified sufficient funding for the current fiscal year.

“Based on the information that I have, we sufficiently budget the retirement 25% for the remainder of the fiscal year,” he said.

“It's not the Senate. We authorize this. It's the administration. They've got that, the mechanism to pay it.”