Special Committee on Retirement Issues chair Rep. Mario Taitano (IR-Saipan) said his panel is open to suggestions on prolonging the NMI Retirement Fund’s lifespan, including pursuing a pension obligation bond that voters approved during the Nov. 6 elections and up to five years temporary cut of 20 to 30 percent in retirement benefits, even as Fund actuary Dylan Porter of Buck Consultants presented their 2010 actuarial study to lawmakers yesterday morning.
The study says the Fund’s resources could be depleted by March 1, 2014 if refunds are paid and employer and employee contributions are not paid, or it could be depleted by Nov. 1, 2016 if the refunds are not paid and employee and employer contributions are paid.
Taitano and other lawmakers have reservations about these projections.
Rep. Richard Seman (R-Saipan) said lawmakers and the Fund’s consultant can spend the whole day discussing projections but at the end of the day, what matters the most is working on solutions to prolong the pension agency’s lifespan.
Taitano said the special committee is working on these solutions, and is encouraging the cooperation and input from stakeholders.
He said he’s aware that temporary benefit cuts may not be popular among retirees, but it’s one of the best ways to save the Fund. He also said his panel will work with the Commonwealth Development Authority and the Fund on the issue of floating a bond and reviewing the CNMI’s credit rating.
House and Senate members took turns asking Porter of Buck Consultants during yesterday’s presentation. However, the presentation and question-and-answer came and went without a unified position from lawmakers on how to deal with the Fund crisis.
Besides Taitano, the other members of the House Special Committee on Fund issues are Floor Leader Ralph Demapan (Cov-Saipan), and Reps. Tony Sablan (IR-Saipan), Ray Tebuteb (IR-Saipan), Cris Leon Guerrero (Cov-Saipan), Tony Agulto (IR-Saipan), and Larry Deleon Guerrero (IR-Saipan).
Taitano said another proposal is to cut disability benefits—by having these Fund members refund their contributions to the pension agency and go to the Social Security Administration instead for supplementary security income eligibility.