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Mandatory Retirement Age after 30 years of service and appropriation for 8th Constitutional Government, RPPL 7-56 2008

SEVENTH OLBIIL ERA KELULAU
RPPL No. 7-56
Second Regular Session, April 2005
(Intro. as HB No. 7-41-2, HD2, SD3, PD1)

AN ACT

To amend Section 1 of RPPL No. 4-49, as amended in RPPL 5-30 and codified in 33 PNC Section 2040, the mandatory retirement after 30 years of service, to authorize and appropriate the sum of $150,000 for the Inauguration of the next President and the 8th Constitutional Government, and for other related purposes.

THE PEOPLE OF PALAU REPRESENTED IN THE OLBIIL ERA KELULAU DO ENACT AS FOLLOWS:

Section 1. Legislative Findings. The intention of mandating retirement upon the completion of 30 years service was to provide civil service employment opportunities for young people and to streamline the national government payroll for greater economic efficiency. Since the effective date of the 30 years mandatory service retirement legislation in July 1999, the cost of paying benefits and the unfunded liability of the Civil Service Plan has increased dramatically. It is apparent that this mandated retirement upon the completion of 30 years of service has negatively impacted the Civil Service Plan and government operations. For example, the actuarial valuation for the plan year 2001-2002, shows that the unfunded liability of the plan at $30,543,581. There has been no change in the rate of employee/government contribution since the inception of the plan in 1987. The recent actuarial valuation also indicated a clear shortfall of the required range of contribution of 16.8%. At this stage in the program, the required payroll contribution should be 28.8%, or $6,902,655, in the form of annual appropriation. This bill proposes to eliminate the required 25 years early:retirement and the 30 years mandatory service retirement, to allow for an actuarially sound civil service plan. The new provisions of this law would enable those employees wishing to retire after twenty-five years of service to do so for a grace period of one year after the effective date of this Act.

Section 2. Amendment. 33 PNC ' 2040, as amended by RPPL Nos. 4-49, 5-30 and 6-37, is hereby further amended to read as follows:

A' 2040. Mandatory retirement age; early retirement.

(a) Upon the effective date of this Act, all employees who are sixty years of age or older shall retire, except for those in employment positions exempted by the Board or those individuals who receive specific exemptions from the Board; provided that an exempted employee may not serve more than one year after the effective date of this Act.

(b) Notwithstanding the mandatory retirement age in subsection (a) of this section, for a grace period of one year after the effective date of this Act, employees covered by the Plan who have twenty-five years or more of total service, as defined by the Plan, shall be eligible for retirement regardless of their age and, upon such retirement, shall receive pension benefits at a level established by the Board.

(c) . . . .

(d) . . . .

(e) . . . .

Section 3. Inauguration Appropriation. The sum of $150,000 is hereby authorized and appropriated for fiscal year 2009 to the Office of the President to fund the inauguration of the next President and the 8th Constitutional Government in January 2009. The entire amount of funds appropriated shall come from local revenues. Funds expended pursuant to this section shall be exempt from 40 PNC Chapter 6; however, best judgment and discretion shall be used in awarding contracts for goods and services.

Section 4. Effective Date. This Act shall take effect upon its approval by the President of the Republic of Palau or upon its becoming law without such approval, except as otherwise provided by law.

PASSED: December 30, 2008

Approved this 31st day of Dec. , 2008.

/s/
Tommy E. Remengesau, Jr.
President, Republic of Palau