A day after the U.S. District Court granted final approval to the Retirement Fund global settlement deal, Gov. Eloy S. Inos said yesterday he’s relieved because “at least you have that uncertainty out of the way,” and on to another set of uncertainty involving finding millions of dollars more to pay retirees and other obligations.
“The only uncertainty right now is to see how we can fund the annual minimum requirements,” the governor, who took a hands-on approach in the global settlement agreement, told reporters after signing two proclamations yesterday morning on Capital Hill.
The Senate’s action today, meanwhile, will be key to whether or not active defined benefit plan members will be able to withdraw the rest of their contributions.
Senate President Ralph Torres (R-Saipan) separately said yesterday that the plan is to act on Speaker Joseph Deleon Guerrero’s (Ind-Saipan) House Joint Resolution 18-10, House Draft 1, acknowledging and approving the settlement deal “as required for the final disbursement of employee contributions.”
The remainder, or $42 million, of DB contributions from the NMI Retirement Fund pursuant to Public Laws 17-82 and 18-2 will be released upon final approval of the settlement agreement.
But a legislative approval is needed before this can be actually disbursed. During the preliminary approval, $10 million was disbursed.
These amounts, however, do not include the interest earned on members’ contributions.
The government would have to find another source of funds for this, just like the restoration of the 25 percent deferred retiree pension.
The governor reiterated a few administrative issues that need to be addressed.
He said he needs to sit down with the settlement fund trustee, Joyce C.H. Tang, as to the existing Retirement Fund staff, class members—both retirees and active—and the 16 that opted out.
“I need to know how they’re supposed to divvy up the funds. The settlement fund would exclude those folks who opted out,” Inos said.
The governor pointed out that the 16 who opted out made contributions to the Fund and “they can’t be left [out] in the system without anything.”
There are also administrative costs to think about.
Inos said he is reconsidering right now an earlier planned executive order moving some previous Fund activities to some departments such as Finance. These activities could include disbursements for those who opted out.
“I still have to meet with the staff and go over various options,” he added.
Growing the economy
Inos reiterated that the CNMI government will do its best to meet its obligations under the settlement agreement.
“That goes with the anticipation that the economy will continue to grow. We should never expect the economy to go down and once we set our goal with the economy going up, then we should strive for that, work harder, so we can meet that,” he said.
The governor plans to convene another joint leadership meeting with the Legislature, now that the court has already granted final approval to the settlement deal in the Betty Johnson class action against the CNMI government and the Retirement Fund.
The Legislature sent last week to the governor a video lottery bill, now under review.
While lawmakers have yet to pass a compromise bill on electronic gaming, there are other revenue-generating bills that are still under committee review.
Pension obligation bond
Inos said the government is “moving” with its pension obligation bond plan.
He said he just had a phone conference with the bond underwriter/counsel yesterday morning.
“We are going to have to meet and go out and talk to bond buyers,” he said, also hoping they would get a “favorable” rating to get a reduced interest rate.
The pension obligation bond law authorizes the CNMI to borrow up to $300 million to help the Retirement Fund.
But the governor said they would parcel it out “based on cash flow and costs associated with the issuance.” The government could start with $40 million to $50 million or less.
“We discussed that a little bit [Tuesday] morning in the [phone] conference. Hopefully, we will get something more firm in the next two weeks,” he added.
Inos also said yesterday that the Mariana House in Washington, D.C. is now being listed for sale.
“We’re selling it for, I believe $900,000 to $1 million,” he added.
The Mariana House has been shuttered for four years since it stopped being the official residence of the then CNMI resident representative to Washington, D.C.
For years, the government has been torn between leasing and selling this property in the nation’s capital.