Supreme Court asked to reconsider decision on retirees’ COLA rights

11/13/2025 - Retired government worker Rosa A. Camacho has asked the Supreme Court to reconsider its decision denying cost-of-living allowance protections for members of the former Northern Mariana Islands Retirement Fund, arguing that the 2% annual adjustment was a vested benefit that cannot be diminished under the CNMI Constitution.

In a petition for rehearing e-filed last Nov. 7, Camacho, represented by attorney Jeanne H. Rayphand of the Northern Marianas Protection & Advocacy Systems Inc., said the high court overlooked or misapprehended key facts and legal points in its earlier ruling.

Camacho’s case stems from a certified question in Betty Johnson et al. v. Arnold I. Palacios and the Northern Mariana Islands Settlement Fund, which tested whether retirees were constitutionally entitled to a 2% COLA under the 1988 Retirement Fund Act, known as Public Law 6-17.

In its earlier opinion, the Supreme Court held that Section 8334(e) of the Retirement Fund Act did not create a constitutionally protected “accrued benefit” for government employees already working when the Act took effect.

But Camacho’s latest filing insists the court’s interpretation was flawed.

“Public Law 6-17 did not amend the 1980 Retirement Fund Act—it repealed it,” Rayphand wrote. “The 1988 Act established a new, comprehensive retirement system in which the 2% COLA formed part of the benefit package, not a separate legislative add-on.”

The petition argues that the 1988 law explicitly made the COLA part of retirees’ “retirement annuity” under Section 8334, which includes a 2% cost-of-living increase beginning on the anniversary of retirement once the member reaches age 62. Camacho contends that this COLA provision created a vested right protected by Article III, Section 20(a) of the CNMI Constitution, which prohibits the diminishment or impairment of accrued retirement benefits.

Rayphand also said the court misstated the timeline of Camacho’s membership in the system. According to the filing, Camacho first joined the old 1980 Retirement Fund but became a Class II member under the 1988 Act when it took effect in 1989—a classification created by Public Law 6-17, not by the earlier statute.

Finally, the petition asserts that later amendments to the 1988 law reducing or suspending COLA payments do not remove the benefit from constitutional protection. Instead, any legislative change that diminishes accrued benefits, it said, would violate the CNMI Constitution.

“Section 8334(e) of the Northern Mariana Islands Retirement Act of 1988 (1989 N. Mar. I. Pub. L. 6-17) grants Class II members an accrued cost-of-living increase benefit that may not be diminished or impaired under Article III, Section 20(a) of the Commonwealth Constitution,” wrote Rapyhand in the e-filing.

Camacho is asking the Supreme Court to reverse its ruling and hold that retirees under the 1988 Northern Mariana Islands Retirement Fund Act are entitled to the 2% annual COLA as a constitutionally protected accrued benefit.

The court has not yet acted on the petition for rehearing.

Report by Mark Rabago