Previous Story
4 firms apply for defined contribution RFP
|
Posted on Dec 11 2006
The NMI Retirement Fund has received four proposals from four investment consultants to handle the third party administration of the government’s defined contribution plan.
Two of them were hand-delivered while the other two were submitted online.
Fund administrator Mark A. Aguon said those four met the deadline, which was Thursday last week, or a week after the Nov. 30 RFP closing.
It is not known yet if the online submissions would actually be accepted since the agency required that proposals must show a postmark date or be hand-delivered.
“We wanted a hard copy of the proposals,” said Aguon.
He said the companies were all given one week after Nov. 30 to turn in their proposals.
Aguon said none of the four companies come from the CNMI. There is at least one company from Guam
Aguon said the proposals will be reviewed by a committee that is yet to be formed. The committee is most likely to consist of people from the Governor’s Office and the Retirement Fund.
Public Law 15-13, known as the Defined Contribution Plan Act of 2006, requires all new CNMI government employees hired on or after Jan. 1, 2007, to be enrolled in the defined contribution retirement plan.
This gives the government less than a month to put everything in place: review of the contract, awarding of the contract, enrolment protocol, setting up of a local office, and the like.
There are less than 3,000 members of the existing defined benefit program who are eligible to transfer to the new plan. Even if they are eligible, though, there is no guarantee that they would all shift to the new program.
Eligible members are those who have less than 10 contributing years with the defined benefit plan.
The government is currently implementing a defined benefit program, which entitles retired government employees to pension benefits for life.
The defined contribution plan is cheaper for the government as it only gives away what the members have contributed.
The government aims to save millions from the implementation of the defined contribution plan, which would reduce its contribution rate to 4 percent from as high as 37 percent, and increase the employees’ contribution share to 10 percent from 6.5 percent.
