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Thursday, April 17, 2014

Crunch time to help Fund
US Congress-backed or $80M short-term pension obligation bond

Lawmakers have a few days left to come up with a list of proposals to help prolong the NMI Retirement Fund’s lifespan—as requested by trustee ad litem Joseph Razzano—for presentation to the court on Feb. 19.

As of yesterday, Senate Fund Committee chair Sen. Ray Yumul (IR-Saipan) said his suggested measures include seeking a U.S. Congress-backed pension obligation bond or an $80-million short-term bond.

Yumul said the immediate goal is to prolong the pension agency’s lifespan beyond March 2014.

“My idea is a United States Congress backing of the pension obligation bond, and that means going to Delegate [Gregorio] Kilili [Sablan] for congressional support,” Yumul said. “If not, we are going to look for a pension obligation bond that’s short-term, maybe less than $80 million, at least to carry us for the next few years so that we can continue to work on the bigger plan.”

That bigger plan includes the possible fee simple sale of public lands that are currently leased to hotels.

As chairman of the ad hoc committee on Fund issues, Yumul asked Senate floor leader Victor Hocog (R-Rota) and Sen. Frank Borja (Ind-Tinian), along with other members, to report to him their own suggestions in the next few days.

Yumul said he is also suggesting that the government run after certain retirees who owe public agencies such as the Commonwealth Development Authority and the Commonwealth Healthcare Corp., and come up with an offsetting plan wherein their payments of these debts will be taken from their regular pensions.

Hocog and other lawmakers earlier also tossed the idea of reducing certain retiree dependents’ benefits.

All these are in addition to House Special Fund Committee chair Mario Taitano’s (IR-Saipan) proposal to defer 20 to 30 percent of pension benefits for up to five years, as well as float a bond as approved by voters during the Nov. 6 elections.

Taitano separately said his committee is committed to coming up with proposals to help the pension agency, of which he is a former employee.

Taitano, Yumul, and other lawmakers met with Razzano, acting Fund administrator Lilian Pangelinan and other Fund officials on Friday.

The government owes the Fund some $300 million in unremitted employer contributions plus interest.

In January, Fund actuary Dylan Porter of Buck Consultants presented their 2010 actuarial study to lawmakers.

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.

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