NMI Fund says it is owed $215M, govt says $213M

The NMI Retirement Fund told Superior Court Associate Judge Kenneth L. Govendo yesterday the government owes the pension system over $215 million in unpaid employer contributions plus penalty, while the government said it’s only $213 million.

Fund board of trustees chair Juan T. Guerrero said the Fund would welcome a compromise of $214 million because, he said, “the difference is very insignificant.”

Both the government and Fund figures include the penalty charge.

“It’s great news to the retirees and hopefully when we start seeing money coming in, then we would have to revisit the board policy,” Guerrero said.

Charles P. Reyes said the $213 million includes an “arbitrary and punitive” 25 percent penalty.

Gov. Benigno R. Fitial, in a separate interview, said the government does not have the money to pay what’s being claimed by the Retirement Fund.

He said had the Legislature acted on the administration’s proposal to allow people to vote to amend the Constitution so the government can provide for a pension obligation fund, then the Retirement Fund could have been paid.

The governor said it is not yet too late for the Legislature to act on the proposal.

Guerrero, meanwhile, said the judge made recommendations as to how the Retirement Fund may be paid.

“There are a lot of issues, like telling us that we need to start looking at things from investment perspective like use some of the money to invest locally so that it’s not only on Wall Street…We need to review the law,” he said.

Another recommendation, he added, is tapping the hotel and container tax to pay the Retirement Fund, as well as some government houses on Capital Hill.

“Whatever the judge will rule, hopefully it will rule in our favor based on what we presented to the court,” he said.

Guerrero said the Fund will be meeting today with government lawyers to discuss the judge’s recommendations on how the Fund could be paid. The parties will be back in court on May 8.

The Retirement Fund has won its case against the CNMI government by default. The Superior Court is now determining how much money is owed by the government to the pension system.

The government also maintains it cannot pay the Fund the actuarial rate of 37.39 percent; only 11 percent in employer contribution as mandated by Public Law 16-32 or the $148 million fiscal year 2009 budget.