Thank you to Mr. Joe Pangelinan, Mr. Mark Staal, Mr. Paul Joyce, Ms. Phyllis Ain, and Rep. Eli Cabrera for working hard on behalf of active employee members of the CNMI Retirement Fund, to see the passage of House Bill 17-315, and to the members of the 17th CNMI Legislature for their support. Mr. Pangelinan and Mr. Staal have worked especially hard to organize active employees and keep us informed.
As has been very thoughtfully and clearly explained over the course of the past year by Mr. Pangelinan and Mr. Staal, the active employee members of the Retirement Fund represent an enormous future unfunded liability to the CNMI government. Simply put, there are no employees following us who will be paying into the Fund. It estimated that covering these “unfunded” future retirees will come at a cost of over one billion dollars to the CNMI government. This is an inconceivable amount to raise and pay out, even for the healthiest of retirement funds, without a body of employees who follow paying into the system. There are simply no investments the Fund can make that will raise even close to enough revenue to cover the full costs of retirement for the active employees.
So we have a solution on the table that, while certainly painful to retirees who will basically be getting back what they put in, is the best option on that table. It is an option that is certainly supported by the vast majority of active employees, who have met to discuss options, and who signed the petition expressing this as the best option considering all of the circumstances.
HB 17-315 will ensure that this large body of employees does not in the end lose all of the wages they've had garnished toward a retirement program that by all acknowledgements, and by simple accounting, will not be able to live up to the contractual promises made. It will allow active employees to take their funds and make alternative investments for themselves and their families.before it's too late. It will ensure that this enormous unfunded liability will never come to fruition. And it will limit focus on solutions to the body of current retirees.
I've heard all sorts of “arguments” against this plan, from “employees will just waste their money,” to “the CNMI should devise a new retirement plan.” Let's remember that these funds were taken from employee earnings to pay into a program promising specific returns, returns that cannot even under the best of investment circumstances be paid. These are funds that represent earned pay, and how those funds may be managed is no one's business but the respective employee. Most of us have plans to roll over those earnings into investments that will benefit our families in the long run. And with regard to devising a new “plan”-there is simply NO math that will account for any plan, that will come close to meeting the contractual promises of the retirement plan we were obligated to participate in.
It certainly can't be easy for many of the active employees, who have come to accept that they will probably have to work many more years than they planned in order to see any benefits from Social Security. They will have to make a multitude of alterations to their life plans. Many will have to work well into very old age. For this active employee, this is a sacrifice that I can make for my family and my daughters. Ensuring our earnings taken toward a retirement fund that by all accounts will not be able to see us through our retirement years are returned now will go a long way to seeing that we can make investments now that will best benefit our lives and our families in the future. They will be of little use in seven or 10 or 15 years from now, if they are there at all.
Thank you again to Mr. Pangelinan, Mr. Staal, Speaker Cabrera, and all of those who worked hard to see HB 17-315 developed and passed, and thank you to Governor Fitial for his consideration signing it.
Robert H. Hunter
Sadog Tasi, Saipan