Hundreds felt a mixed sense of relief, excitement, and worry as they picked up their checks or got their direct bank deposits yesterday as part of the NMI Retirement Fund’s disbursements of over $40 million in remaining defined benefit plan employee contributions refunded to over 1,700 individuals.
With portions of the over $40 million expected to circulate in the local economy, businesses are also bracing for a windfall. These could include grocery and retail store shopping, new car purchases, house renovations, and bank deposits.
Checks picked up from the Retirement Fund office on Capital Hill yesterday ranged from $20,000 to $100,000, based on interviews with some of the members.
Check releases continue today and the days ahead.
“Holding the check in my hand gives me a sense of relief. I’m thankful we’re able to get what we put in, minus the interest. I will be saving most of it for what it was saved for—retirement. I am thinking about buying stocks or putting it in TCD,” Luise Quitugua Noisom, a registered nurse at the Commonwealth Healthcare Corp., told Saipan Tribune moments after she got her check from the Retirement Fund building on Capital Hill yesterday morning.
Noisom, a mother of five, said she’s also looking into becoming a member of social security.
“I am going to invest most of what I received for my retirement. Some of it I will use for fixing my car, renovating the house,” the 56-year-old CHC nurse said.
Noisom, who has worked at CHC for 24 years, said she’s still hopeful that the CNMI government “will find a way to pay the interest.”
With her 24-year government service, Noisom put in a substantial amount of contribution to the Fund—and got most of it yesterday.
While she’ll make sure to set aside most of what she got for her later years, Noisom worries about the others who might have different priorities for their money.
“It is their money but I hope they will really save most, if not all of it, for their retirement. When Fund released refunds a few months ago, I saw a lot who bought new cars and bought a lot of things. I know it’s their money and they can spend it any way they want to, but I worry they won’t have anything left by the time they retire,” she added.
One Fund member said he started seeing people as early as 7:15am at the Fund building, waiting for the 8am start of the release of checks yesterday.
“I rolled over everything to my 401(k) for my retirement. I hope many others will also do the same. I worry that if I don’t roll it over to a 401(k), I might not have anything when I retire from government,” one of them said.
Some of those who got their checks said they didn’t want their names to published in the newspaper, concerned that their relatives would start asking them for money.
Steve Lee, of San Vicente, said he went to pick up his wife’s check “because she can’t leave work.”
“It’s about time the government release these checks to the members before everything is gone. It’s up to my wife how she wants to spend it but I heard her say she wants to renovate the house,” Lee said.
Mila B. Tan, a nurse at CHC since 2001, said she’s “very glad” to get her DB contribution which she will strictly use for her retirement.
“At my age, I’m 57, I’m already thinking about going home to the Philippines. I plan to do farming, raise poultry,” she said.
Tan said the first refund check she got has been safely set aside, and the same will be done for the rest of the refunds she got yesterday.
She said financial discipline and proper budgeting, along with investments, would spell the difference when it comes to making the refunds last through their retirement years.
“The first check, I didn’t touch it. I saved everything,” she added.
Maria S. Camacho, of Dandan, said she picked up her son-in-law’s check from the Retirement Fund and she expects that most of it will go to her son-in-law’s medical expenses.
“He is currently in Honolulu, Hawaii on medical referral. He would need this money. I’m happy that he’s finally got it,” Camacho said.
Another CHC nurse, Mila Cultura, said she’s happy to finally get her DB contribution to the Fund.
“We still have an unstable economy, and as foreign worker, we still have unstable immigration status. What if they send us home after 2014? But the first refund check I got, I saved everything. With this second check, I will also save most of it for retirement and the rest, for the future of my children, for their education,” the mother of three said.
Alex Sablan, president of the Saipan Chamber of Commerce, said member businesses “are expecting a windfall” as a result of the Fund’s disbursement of over $40 million to members.
He said days prior to the actual release of the checks and direct deposits, some businesses have already reported “vehicles being purchased” and “accounts being settled,” among other things.
“These are all positive signs. The money is circulating in the economy. The multiplier effect of $40 million is huge,” he said.
But Sablan is also “hopeful” that those who got their refunds would “reinvest in some type of 401(k)” or similar programs for their retirement years.
Acting Senate president Victor Hocog (R-Rota) shares this sentiment. He hopes that people who received their checks or direct deposits will exercise “utmost care” and think about their retirement years.
“It’s already expected that there will be a lot of economic activities when you have $40 million in the hands of people within days. But if they want to invest in their retirement and invest in their children’s future, this is the right time to do that,” he said.
Hocog said as of 4pm, 35 on Rota had already picked up their checks, while seven had yet to be picked up because most of them were off-island yesterday.
“And 154 also on Rota got their direct deposits,” he said.
As of 8pm last night, Fund in-house legal counsel Viola Alepuyo said that 524 checks were released on Saipan. On Rota, all but seven were distributed, while on Tinian all but one were issued.
Alepuyo earlier told Saipan Tribune that there are a total of 1,710 recipients: 1,372 on Saipan, 141 on Tinian, and 197 on Rota.
Alepuyo said 708 are checks and the rests are ACH (automated clearing house).
Public Law 17-82 allows Fund members to withdraw the full amount of their contributions without separating from the government. Public Law 18-2, meanwhile, compels the Fund to release up to 50 percent of members’ contributions within 30 days of submitting a refund application.
A joint resolution that the House and Senate adopted on Friday paved the way for the Fund’s disbursement of over $40 million in remaining defined benefit plan employee contributions.
Some $10 million were disbursed following the preliminary approval of a global settlement agreement in Johnson v Inos on Aug. 6 in the U.S. District Court for the NMI.
Under the agreement, the remaining $42 million will be released after the court’s final approval of the settlement agreement and then after legislative approval. Designated judge Frances Tydingco-Gatewood gave the final approval on Sept. 30.