DRAFT CSC, Title 9. Public Service System
 
CHAPTER 7
Early Retirement

1301.  Short title.
1302.  Purpose.
1303.  Findings.
1304.  Definitions.
1305.  Early Retirement Program established.
1306.  Program list.
1307.  Voluntary Program participation.
1308.  Notice.
1309.  Compensation for eligible permanent employee under the Program.
1310.  Employees in Program not eligible for reemployment.  
1311.  Governor authorized to obtain a loan for the Program.
1312.  Appropriations to Early Retirement Program Escrow Account; Loan repayment; Reversion of funds.
1313.  Annual report.
1314.  Chapter supersedes other laws.
1315.  Severability.

      1301.  Short title.
     This Act Chapter shall be known and may be cited as the "Chuuk State Early Retirement Act of 1996."

Source:  CSL 3-97-03, 1, modified.

Cross-reference:  The constitutional provision on mandatory retirement is found in Art. XI, Section 4 of the Chuuk State Constitution.  The statutory provisions on mandatory retirement are found in Chapter 5 of this title.

Editor's note:  CSL 3-97-03 that created this Chapter was signed into law by the Governor on January 9, 1997.

      1302.  Purpose.
     The purpose of this Chapter is to establish a program of early retirement for employees of the State Government due to impending reduction in Compact funding during the Compact step-down and the termination of Compact funding after the Compact period.

Source:  CSL 3-97-03, 2.

        1303.  Findings.
       The State finds that:

     (a) (1)  The impending reduction in Compact funding during the remaining years of the Compact period and the termination of Compact funding after the Compact period as required by the terms of the Compact of Free Association require the State to initiate and implement immediate cost-saving and cost-reduction measures in order to continue to provide essential public services.

     (b) (2)  The State's economic situation has not yet developed to an adequate level that will enable the State to continue to provide essential public services in the absence of cost-saving and cost-reduction measures.

     (c) (3)  This Act Chapter establishes an early retirement program which shall, ease the impact of the necessary cost-saving and cost-reduction measures on the employees and the public.  In addition, this Act Chapter enables the State to continue to provide essential public services within the limited  fundings available during the Compact step-down and after the Compact termination.

Source:  CSL 3-97-03, 3, modified.

      1304.  Definitions.
     In this Act Chapter:

     (a) (1)  "Base Salary" means, for the purpose of compensation, the average bi-weekly payment to an employee over the most recent 26 pay periods based upon a 64 hour bi-weekly pay period.  The most recent 26 pay periods shall be determined starting from the date such employee was approved for early retirement.  "Base Salary" does not include differentials of allowances for standby, night work, transfer, overtime, holiday work, travel, per diem, or other similar allowances.

     (b) (2)  "Compact" means the Compact of Free Association with the United States of America.

     (c) (3)  "Permanent employee" means a public service system, unclassified, or exempt status State employee, who has completed at least two years of continuous State public service before notification of selection or applying for early retirement.  "Permanent employee" does not mean State employees in appointed or elected positions.

     (d) (4)  "Probationary employee" means a State employee who has not completed at least two years of continuous State public service before notification of selection or applying for early retirement.

     (e) (5)  "Program" means the early retirement program with its eligibility requirements and benefits as defined in this Act Chapter.

     (f) (6)  "State Public Service System Act" means the State public service system as established by TSL No. 4-59 as amended.

Source:  CSL 3-97-03, 4, modified.

      1305.  Early Retirement Program established.

     (a) (1)  There is hereby established a Chuuk State Early Retirement Program for the benefit of permanent employees whose positions may be abolished in a manner consistent with this Act Chapter and the economic realities of the State.

     (b) (2)  The program shall begin on the date the Governor certifies that there are funds available in the program for disbursement to employees and shall continue from the date of certification for a period not to exceed two years.

     (c) (3)  The certification shall clearly state the date the program will end.

     (d) (4)  Copies of the certification shall be provided to each branch of the State Government.

Source:  CSL 3-97-03, 5, modified.

Cross-reference:  The constitutional provision on mandatory retirement is found in Art. XI, Section 4 of the Chuuk State Constitution.  The statutory provisions on mandatory retirement are found in Chapter 5 of this title.

      1306.  Program list.
     Within 60 days of the effective date of this Act Chapter, the Governor, the Speaker of the House of Representatives, the Senate President and the Chief Justice of the Chuuk State Supreme Court shall submit a list to the Office of Personnel for their respective branch of government.  Each list shall include each position:

     (a) (1)  Ineligible for inclusion in the program.  A position shall be ineligible if such position provides essential public services and if abolished would cause the State to fail to provide such essential public services.

     (b) (2)  Which shall be terminated because such position is redundant or inefficient.

     (c) (3)  Which may be eligible for inclusion in the program.

Source:  CSL 3-97-03, 6, modified.

Editor's note:  CSL 3-97-03 that created this Chapter was signed into law by the Governor on January 9, 1997.

      1307.  Voluntary Program participation.
     A permanent employee in a position eligible for inclusion in the program under Section 6 (e) 1306(3) of this Chapter may participate in the program by submitting a written application to the Office of Personnel and if:

     (a) (1)  There are available funds in the program; and

     (b) (2)  Long term cost savings would be achieved by the employee's participation in the program; and

(c) (3) (1) (a)  The respective branch of government may abolish the position without compromising essential public services; or

 (2) (b)  Such position may be filled by a permanent or probationary employee and such employee's previous position is abolished.

Source:  CSL 3-97-03, 7, modified.

Cross-reference:  The constitutional provision on mandatory retirement is found in Art. XI, Section 4 of the Chuuk State Constitution.  The statutory provisions on mandatory retirement are found in Chapter 5 of this title.

      1308.  Notice.

     (a) (1)  The Director of the Office of Personnel shall provide written notice to each permanent employee in a position listed under Section 6(b) 1306(2) of this Chapter at least 60 sixty days before the date of employment termination.  Such notice shall also be provided to the respective government official who shall prepare and submit for processing the necessary personnel action forms.  The notice shall include, but shall not be limited to, the following information:

     (1) (a)  The title and location of the position to be abolished.

     (2) (b)  The reasons why the position is to be abolished.

     (3) (c)  The date on which the position will be abolished.

     (4) (d)  The amount of compensation which the employee would receive under the compensation options in Section 1309 of this Chapter.

     (5) (e)  The dates for the periods covered by each compensation option in Section 1309  of this Chapter.

     (6) (f)  The date on which the employee shall choose a compensation payment plan.

     (7) (g)  The date on which payment will be made to the employee.

     (8) (h)  Other benefits such as annual leave lump-sum payment, COLA if eligible and unpaid allotment which the employee may receive by reason of his early retirement.

     (9) (i)  Any anticipated deduction from  the lump-sum salary compensation, such as leave advances, salary advances, per diem or other travel advances, allotments, or any other form of liability owed to the government.

     (10) (j)  The requirement that employees who retire under the program shall not be eligible for reemployment by the State Government as provided under Section 1310 of this Chapter until October 1, 2001; and

     (11) (k)  Any other relevant information which the Director of Personnel deems necessary.

     (b) (2)  The Director of the Office of Personnel shall provide written notice to each permanent employee in a position listed under Section 6(a) and 6(c) 1306(1) and 1306(3) of this Chapter.  Such notice shall include the permanent employee. s eligibility status for participation in the program and, if eligible, the procedure for applying for early retirement and the compensation options.

     (c) (3)  The Director of the Office of Personnel shall provide written notice to each probationary employee in a position listed under Section 6(b) 1306(2) of this Chapter at least 60 sixty days before employment termination, however, such employee shall not be eligible for compensation under the program.  Such notice shall include, but shall not be limited to, the following information:

     (1) (a)  The title and location of the position to be abolished.

     (2) (b)  The reasons why the position is to be abolished.

     (3) (c)  The date on which the position is to be abolished.

     (4) (d)  Other benefits such as annual leave lump-sum payment, COLA if eligible, and unpaid allotments.

Source:  CSL 3-97-03, 8, modified.

      1309.  Compensation for eligible permanent employee under the Program.

     (a) (1)  A permanent employee eligible for participation in the program and less than 55 years of age may choose one of the following compensation plans subject to availability of funds as determined by the Governor:

     (1) (a)  A lump sum payment equaling 48 base salary pay periods.

     (2) (b)  A lump sum payment equaling 24 base salary pay periods and 26 bi-weekly base salary payments.

     (3) (c)  52 bi-weekly base salary payments.

     (b) (2)  A permanent employee eligible for participation in the program, who is 55 years of age and less than 60 years of age may retire and, subject to availability of funds as determined by the Governor, shall receive a lump-sum payment equaling six 6 base salary pay periods and a bi-weekly amount equal to such person. s anticipated social security benefit at age 60.  Such payments shall terminate upon the person reaching the age of 60.

     (1) (a)  The Director of Treasury may enter into an agreement with the Social Security Administration (SSA) authorizing the SSA to administer the payments under this Subsection.  The agreement may also provide for the collection of reasonable administrative fees by the SSA.

     (c) (3)  A permanent employee eligible for participation in this program who is more than 60 years of age, shall retire pursuant to CSL No. 3-95-27 Chapter 3 of this Title and shall receive a lump sum payment equaling six 6 base salary pay periods.

     (d) (4)  The following deductions shall be made from each payment due to an employee:

     (1) (a)  Any advance annual or sick leave owed by the employee.

     (2) (b)  Any salary advance.

     (3) (c)  Any per diem or other travel advance including outstanding travel authorizations.

     (4) (d)  Any other adjustment which the employee may owe the Government.

Source:  CSL 3-97-03, 9, modified.

      1310.  Employees in Program not eligible for reemployment.
     Any permanent employee who receives any compensation under the program shall not be eligible for reemployment with the State Government in any capacity until October 1, 2001.

Source:  CSL 3-97-03, 10.

      1311.  Governor authorized to obtain loan and pledge security for the Program.
     The Governor may negotiate and obtain a loan or funds for the program.  The Governor may authorize the pledge of security necessary to secure the borrowing as well as to satisfy any financial obligations attributable to the State related to or resulting from such borrowing.  The loan or funds received shall not exceed $6,000,000 and shall be deposited in an escrow early retirement program account for the program and shall only be expended in the manner authorized by this Act Chapter.

Source:  CSL 3-97-03, 11, as amended by CSL 4-97-14, 1.

      1312.     Appropriations to Early Retirement Program Escrow Account; loan repayment; Reversion of funds.

     (a) (1)  To facilitate the acquisition and repayment of a loan authorized under Section 1311 of this Chapter, the State shall continue to appropriate funds for any position abolished and vacated pursuant to the program in the same amount budgeted for each fiscal year for each respective position held by the employee.

     (b) (2)  The funds so appropriated shall be deposited by the Governor or his designee in the escrow account established in Section 1311 of this Chapter to earn interest and may only be withdrawn, unless otherwise provided in this Act Chapter, by the Governor or his designee for the following purposes:

     (1) (a)  Payment of compensation pursuant to Section 1309 of this Chapter to permanent employees participating in the program.

     (2) (b)  Reimbursement to the Social Security Administration for any payments made pursuant to Section 9(b)(1) 1309(2)(a) of this Chapter.

     (3) (c)  Repayment of any loan used to administer the program.

     (4) (d)  Training costs directly related to the program and not to exceed a total of $650,000.

     (c) (3)  To facilitate the State. s repayment of any loan obtained pursuant to Section 1311 of this Chapter, there is hereby authorized for appropriation from the General Fund, the sum equal to 10 percent of the borrowed principal in Fiscal Year 1998; 20 percent of the borrowed principal in Fiscal Year 1999; 30 percent of the borrowed principal in fiscal year 2000; and 40 percent of the borrowed principal in Fiscal Year 2001; provided, that the repayment schedule shall only be applied against the established borrowed principal based on actual number of employees participating in the Chuuk State Early Retirement Program, but not based on the authorized $5.3 million.  The funds appropriated shall be deposited in the Early Retirement Program escrow account.  By September 30, 2001 the balance in the escrow account shall not be less than the total amount borrowed.

     (d) (4)  After full repayment of any loan and after September 30, 2001, any remaining balance of the funds in the early retirement program escrow account shall revert to the General Fund.

     (e) (5)  If at any time during the term of the program the amount in the early retirement program escrow account exceeds the principal amount borrowed, the amount in excess of the principal may be withdrawn and revert to the General Fund.

Source:  CSL 3-97-03, 12, subsection (3) amended by CSL 4-97-14, 2, modified.

      1313.  Annual report.
     The Governor shall submit a report to the Legislature not later than the first Monday of May of each year regarding the condition of the program, actual expenditures from the last completed fiscal year, estimated expenditures for the fiscal year in progress, a full accounting of the funds received by the State for the program, and a full accounting of funds deposited in an escrow account as authorized in Section 1311 of this Act Chapter.

Source:  CSL 3-97-03, 13.

      1314.  Act Chapter superseded other laws.
     The provisions of this Chapter shall supersede in their entirety any other provisions of any State laws that may be interpreted as inconsistent with any provision of this Chapter.

Source:  CSL 3-97-03, 14.

      1315.  Severability.
     If any provision of this Chapter, or amendments thereto, or application thereof to any person, thing or circumstances is held invalid, the invalidity does not affect the provisions or application of this Chapter, or amendments, that can be given effect without the invalid provisions or application, and to this end the provisions of this Chapter, and the amendments thereto are severable.

Source:  CSL 3-97-03, 15.

Cross-reference:  The constitutional provision on mandatory retirement is found in Art. XI, Section 4 of the Chuuk State Constitution.  The statutory provisions on mandatory retirement are found in Chapter 5 of this title.