Some retirees are upset over recent statements made by CRA Chairman, Larry Cabrera, and Vice Chairman, Diego Benavente.
One of the items that has raised concern was a media report that stating that Cabrera is pushing for the creation of a new tax on benefits. The story headline ( “Retirees amenable to taxing their pensions, benefits” ) made it clear that the CRA has voted on such a proposal and the group was backing it. Some CRA members were not fully aware of this fact. Upon request, I was informed that a vote on this issue was made at a CRA meeting held about two months ago. At this meeting CRA members voted to endorse the following proposal. Many may have never read the proposal or seen what they were voting on.
Excerpt From CRA Chair Larry Guerrero in a letter of 4/16/12:
3. Draft a special revenue-generating legislation, which would create a special account within the Retirement Fund into which all monies received by levying a ten percent (10%) dedicated tax paid to retirees, survivors and disabled. This account is necessary to guarantee the repayment of the pension obligation bond should the CNMI be in default. Otherwise, the funds are to be invested under a closely scrutinized investment program.
The use of a tax on benefits with proceeds of the tax being directed to the General Fund would have the same net effect of cutting benefits or reducing government mandated contributions.
A second item that ruffled a few feathers was a recent interview on KSPN2 News in which Benavente endorsed and supported the Governor’s State of Disaster Emergency and Executive Restructuring.
At a CRA General Membership meeting held under a week ago, over 180 CRA members overwhelmingly voted to have CRA oppose the Emergency Declaration (see vote here: http://www.youtube.com/watch?v=iNUQ3lE-1qQ ). Concerned retirees could not understand how Benavente, who was in attendance at that meeting, could have witnessed the CRA membership vote yet come out publicly with an opposing stance on this sensitive matter.
Late last week a number of retirees have also voiced concerns over the CRA’s stance on a proposed Pension Obligation Bond.