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Buck Consultants to meet with Legislature this week
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Posted on Apr 20 2008
The NMI Retirement Fund actuary will meet with the Legislature this Friday to talk about its latest assessment of the CNMI government’s pension program.
Buck Consultants will also discuss the contribution rate that the actuary has determined the government should pay to the Fund.
The joint meeting of the House of Representatives and the Senate will take place at 10:30am, April 25, 2008, at the House chamber.
Fund administrator Mark Aguon has urged all government agencies to send a representative to the meeting, “as all departments will be financially affected by the findings of the Fund’s actuary.”
The latest actuarial report will update projections made by Buck Consultants in 2006, shortly after three Fund-related laws were enacted.
Those laws created a new defined contribution plan, extended the targeted funding date of the pension plan from 2020 to 2045, and suspended government contributions to the plan until Oct. 1, 2007.
Then, Buck Consultants projected that the suspension of the contributions would shorten the Fund’s lifetime by five years. Other findings were:
-If contributions are made according to the actuary’s recommendations (39.7 percent of payroll), the Fund’s assets will remain positive through 2033, and perhaps longer.
-If contributions are made according to recent practice (24 percent of payroll), the Fund’s assets will last until 2024.
-If “uncollectible” receivables to the plan of $125 million are repaid, the Fund’s lifetime will be extended from 2024 to 2030 (at the 24-percent contribution rate).
-If no new benefits are earned under the plan, and contributions continue according to recent practice (24 percent of payroll), the Fund’s lifetime will be extended from 2024 until 2032.
-If no new benefits are under the plan, and contributions stop entirely, the Fund’s lifetime will be shortened from 2024 to 2016.
That the government would fail to contribute to the Fund beyond 2007 was not factored in the assessment. To date, the Fund has not received employer contributions for fiscal year 2008.
