Fund chair: Fitial fails to offer new solutions for NMI retirees

The chairman of the Retirement Fund board of trustees, Juan T. Guerrero, is disappointed with Gov. Benigno R. Fitial’s ultimate “solution” to the decade-old problems of the Commonwealth retirees.

In his State of the Commonwealth Address yesterday, Fitial had cited the importance of a pending omnibus bill intended to reform the Fund and the immediate suspension of the ongoing lawsuit that will determine the amount owed by the government to the Fund.

Guerrero said he was expecting the governor to announce alternative means of addressing the Retirement Fund problems but was disappointed to hear none.

“Other than endorsing the omnibus bill and asking for the suspension of the litigation, I didn’t see or hear any other means to resolve the Fund issues. I was even expecting that some budget allocation or supplemental funding would be identified…but there was none,” he said.

Fitial said the Fund’s lawsuit squanders precious government resources and will not produce money for retirees.

“We all need to work together to find solutions to protect the Fund, with cooperation rather than confrontation. I urge all parties to suspend litigation and engage in good faith mediation to resolve these issues,” the governor said.

Guerrero remained adamant about finishing the court case, claiming the board is not being confrontational with the Executive Branch.

“I don’t think the Fund is confrontational; we’re just doing our job. We need to proceed with this [lawsuit] for the best interest of the Fund and the retirees. We’re not saying we will not negotiate…but only after the court decides and the payment has to be made by the central government. We will not withdraw the lawsuit,” he told Saipan Tribune.

Guerrero pointed out that the omnibus bill being touted by the governor contain reforms that were actually initiated by the Fund, in consultation with the many parties and the Legislature.

The chairman said the use of a lot of data to justify the governor’s views does not reflect anything. “Paying the Fund… is more critical to us,” he added.

Fitial reported that based on the Fund’s own actuarial report, the liability of the Defined Benefit Plan program grew from $809 million in Oct. 1, 2000, to $1.007 billion by Oct. 1, 2005.

With decreasing government revenues, he said the Fund obligation would demand a greater portion of government resources and take away needed funding for essential public services.

He also cited the passage of Public Law 15-70 that reform the DBP and which decreased the liability from $1 billion to $879.3 million in October 2007.

“Our reform efforts, however, were dampened by the severe market downturn in 2008, and more needs to be done to save the Fund,” the governor said.