US District Court of the Northern Marianas Islands Photo: RNZ Pacific / Mark Rabago
Retirees in the Commonwealth of Northern Marianas (CNMI) may have to return tens of thousands of dollars, after the Settlement Fund enacted a 2003 law that struck out overtime hours from their retirement benefits.
CNMI Public Law 13-60 eliminated overtime pay from the calculated salary of retirees, but overpayments were not collected then.
Retirees have banded together and formed the CNMI Retirees Association.
The Association said a lot of their members are now being required by the Retirement Fund - now called the Settlement Fund - to pay back anywhere from a few thousand dollars to more than US$120,000.
The group's secretary Mariano Taitano said the Fund is basing its decision to collect these overpaid benefits on Public Law 13-60, but which is being implemented retrospectively for retirees that retired even before 2003.
"The law that is supposedly repealing overtime pay, as well as bonuses for certain elected officials, was enacted back in 2003. However, the Settlement Fund did not collect overpayments then," he said.
"Now retirees are being asked to pay back compensation for overtime hours dating back to when they first started receiving their retirement pensions.
"I'm baffled with this decision - why can't they go from when the law was enacted?
"This law did not say overtime hours. Whether that word was mistakenly omitted, therefore it's only fair that these retirees be left alone and receive their benefits also based on their overtime hours."
Taitano said when it comes to overtime hours, retirement contributions are deducted and employer contributions were also remitted into the Settlement Fund.
"If it's the Settlement Fund's contention that retirees have to return these overpaid retirement benefits, then they must offset it from their retirement contributions," he said.
"It's only logical and fair. After all, these retirees contributed that and you're going to keep the money? Then refund that money or offset it from the overpayment. Where's the fairness?"
Taitano said retirees have met with members of the legislature regarding this issue and have lodged their respective complaints through the help of a private lawyer.
"Retirees have lodged complaints with the Settlement Fund and it's subject to arbitration," he said.
RNZ Pacific has contacted the Settlement Fund for comment.