Court Rules Cost-of-Living Adjustments Are Not Protected Retirement Benefits

The Supreme Court of the Commonwealth of the Northern Mariana Islands issued its opinion in Camacho v. Northern Mariana Islands Settlement Fund on November 3, 2025, answering a certified question from the United States Court of Appeals for the Ninth Circuit. The Court held that section 8334(e) of the Northern Mariana Islands Retirement Fund Act of 1988 did not grant Class II members of the Retirement Fund a constitutionally protected accrued cost-of-living adjustment (COLA) benefit under Article III, section 20(a) of the NMI Constitution.

The Court emphasized that while membership in the Retirement Fund is a contractual relationship, only the core pension promise existing when employment began is constitutionally protected. Because COLAs were introduced after appellant Rosa A. Camacho joined the Retirement Fund, they were deemed legislative policy adjustments and not protected contractual benefits. This decision affects hundreds of former government employees across the Commonwealth.