The Inos administration and lawmakers welcomed yesterday the U.S. District Court’s final approval of an NMI Retirement Fund global settlement deal but they all said there’s still much work ahead, including finding millions more in new revenues to meet the deal’s requirements and restore the 25 percent deferred retirees’ pension, among other things.
This comes barely a year after the Fund filed for bankruptcy, making it the first public pension agency to do so on U.S. soil. A court later junked the bankruptcy filing.
“With the court’s final approval of the settlement agreement, the administration, along with the other parties in this case can now move on with a deep sense of assurance for the members of the class,” press secretary Angel Demapan said when asked for the administration’s comment.
U.S. District Court for the NMI designated judge Frances Tydingco-Gatewood granted final approval yesterday of the global settlement agreement in retiree Betty Johnson’s class action against the CNMI government and the Fund.
‘More than fair’
Rep. Ray Tebuteb (Ind-Saipan), one of the 16 Fund members who opted out of the settlement class, said yesterday that Tydingco-Gatewood “was more than fair” in her decision.
“She was receptive of all statements and concerns raised. I am happy about the court’s decision and for the class members affected by her decision. I wish all parties well, including those who opted in or opted out,” he told Saipan Tribune.
Speaking as a retiree, Rep. Christopher Leon Guerrero (Cov-Saipan) said he’d rather receive “some than none at all” in guaranteed pension.
Still, Leon Guerrero believes that the court will not approve Johnson’s lawyers’ proposed fees of over $40 million. That tab is opposed by lawmakers, the Inos administration, and the Fund.
He said he will continue to help ensure that the 16 who opted out of the class will still be protected. He said a minimum of $272,000 is needed for these opt-outs.
Senate Vice President Victor Hocog (R-Rota) and Rep. Teresita Santos (R-Rota) separately said the government can now move on to the next phase, which is to find more ways to generate revenues to meet its obligations.
“We now know where we really stand,” Hocog said. “And with only 16 who opted out, a small number, that would make it easier for us to help them too. They should not lose hope.”
Santos and Hocog also oppose the proposed Johnson attorneys’ fees. The judge will rule on this matter at a later date.
The Inos administration said it will assess administrative matters now that the settlement has been made final. These include seeking to clearly define the role of the settlement trustee, the Fund and its staff, and the administration of benefits for the few who elected to opt out of the class settlement.
“Governor Inos notes that this was a drawn out and sometimes painful process for everyone, but the government, in agreeing to this settlement, did so in good faith and in recognition that the agreement was as fair as it would get given the circumstances,” the press secretary said.
New revenues needed
The Inos administration vows to continue engaging the Legislature to work on revenue-generating measures to help the government meet its obligations pursuant to the settlement.
“And above all else, to reach a point where we can start restoring the 25 percent reduction in benefits for retirees,” Demapan added.
The governor, in an interview hours before the court’s final approval, said he’s not aware of anything that would not allow the settlement agreement to move forward.
He said the government needs “at least $12 million more” this fiscal year to meet the requirements of the settlement agreement.
This is on top of the $20 million that’s appropriated for the Fund under the fiscal year 2014 budget. This is because the government has to pump $25 million into the settlement fund in fiscal year 2014 and continue paying into Group Health and Life Insurance some $7 million to $9 million.
These figures still do not include the money that the government needs to raise to pay Johnson’s attorneys, as well as the restoration of the 25-percent pension cut.
“We need $12 million to make it up; whether that would be the supplemental budget is a different question. Supplemental budget is going to be a function of the additional resources that we identify. But we do need $12 million. I hope that we get more,” Inos told reporters after he and Lt. Gov. Jude U. Hofschneider jointly signed five proclamations yesterday morning.
A revenue-generating bill allowing video lottery in the CNMI is now up for governor’s action, while a conference committee has recommended passage of a compromise electronic gaming bill.
Inos said he supports a video lottery bill in principle but he is still reviewing the bill that the Legislature sent to him. He also has yet to see the conference committee report on the electronic gaming bill.
When asked whether he thinks these revenue-generating bills are enough, the governor said, “We still need more.”
Inos said almost the same thing when asked whether the Saipan casino gambling bill pending at the Senate is still needed.
“We still need more revenue generation. It’s not just to satisfy current requirements. Next year, we’re going to face the same funding requirement, if not more—$2 million more because the minimum guaranteed payment would be $27 million [next year] as opposed to $25 million this year,” he said.