SAIPAN — Big ruling out today: the NMI Supreme Court answered a Ninth Circuit certified question and said cost-of-living adjustments (COLAs) are not constitutionally protected retirement benefits for Class II members of the former Retirement Fund.
The justices said membership in the Fund is a contract, but only the core pension promise from when you started work is protected. Because appellant Rosa A. Camacho joined before COLAs existed, they weren’t part of her vested benefits. Lawmakers’ on-again, off-again COLA changes were policy calls—not constitutional entitlements.
Applying the Tano Group three-part test, the Court found no substantial impairment under Article III, section 20(a). It also noted other states—Colorado, Alaska, Hawaiʻi—let legislatures revise or reduce COLAs without violating pension protections.
The opinion is by Justices Pro Tempore Robert J. Torres, Jr., F. Philip Carbullido, and Sabrina S. McKenna.
