Senate committee agrees to public hearings on proposed CNMI term pension plan

Senate President (chair) introduced Senate Bill 24-01 on April 9, 2025, proposing a CNMI term pension plan and asked the Fiscal Affairs Committee to carry the bill through a series of public hearings on Saipan, Tinian and Rota.

The chair said the bill is not “written in stone” and urged members to consider amendments before formal public hearings. “I propose that we have 3 here on Saipan and 1 on Tinian,” the chair said, and asked members to endorse a June timeframe for hearings so the committee and staff can account for graduations and other scheduling conflicts.

Nut graf: The proposed plan is a recycled bill from previous legislatures intended to offer an alternative retirement option for government employees who are not in the defined benefit system and to address limited retirement benefits for some workers. Committee members pressed for more detail on funding, administration and benefits and asked that relevant executive-branch officials be invited to provide technical guidance before hearings.

Committee discussion focused on whether participation would be voluntary, administrative responsibilities, funding and reporting. Senator Karina L. Magoffna asked whether the program would be optional; the chair replied, “At its face value, yes, it is.” Senators requested clarification of several definitions in the draft, including the roles of a “custodian” and “plan custodian,” who qualifies to be appointed and who would determine qualifications. The chair said the Secretary of Finance would be tasked as administrator if the law is enacted and could outsource custodial operations similar to a 401(k) model.

Members also raised specific policy questions that the committee said it will resolve before public hearings: whether the plan should include employer contribution levels, if and how forfeited employer contributions would be treated, reporting and audit requirements, vesting and refund rules, how regular interest rates would be set, and whether health insurance or other post-retirement benefits should be included. Senator Manglona urged outreach so younger employees consider participation, noting that lack of retirement systems pushes some employees to leave public service.

Committee staff will compile agency data on former defined-benefit members and settlement-fund participants to estimate fiscal impacts. The chair said the committee would circulate requests for information to executive and autonomous agencies and then return to the committee to adopt any substantive amendments prior to scheduling hearings. The committee did not vote on the bill and left it in committee for additional drafting and agency input; members indicated hearings would likely begin no earlier than June to maximize public participation.

Ending: The committee directed staff to gather detailed membership and fiscal data from agencies and to return with a refined draft for committee markup and scheduling of island hearings.