Beating Retirement’s dead horse

By William H. Stewart
Special to the Saipan Tribune

Aside from the lively political campaigns every four years, I have the impression that many local people do not display much of a pro-active interest in the affairs of the NMI government not otherwise readily visible such as those having a direct impact as, for example, the situation with the lack of piped potable water. As a case in point, I don’t see where too many retirees—and those government employees currently paying into their retirement account—appear overly concerned about their government’s neglect when it come to honoring an obligation to meet, and pay, or at least start to pay, the employer’s outstanding contribution to the Retirement Fund, which now amounts to millions of dollars—the purchasing power of which declines each year as a result of inflation.

I ask myself why the apparent disinterest and acquiescence? Could it be that they are simply unaware of the serious consequences that are certain to occur in a few years? Is it possible that the islands’ historical experience has provided a sense of false assurance and a state of mind that “no matter what happens the government will take care of me?”

If true, this unfortunate and unrealistic attitude may well be a result of an American policy (military and civilian) that for so many years maintained the islands as protected “wards” of the United States, a time when power and water were free. The policy may have instilled within many a “mindset” and attitude of “why worry—be happy, the government will handle it.” This was indeed the situation during the Naval Administration (1944–’62), carried over thru Interior’s Trust Territory administration (1962–’78) and continued to this present period of so-called “self government.” A span of years that in many respects can be likened to that of a “free lunch” financed largely as a result of U.S. government grants in one form or the other.

Of course, you can’t “broad-brush” such observations and apply them to everyone. But something must account for the apparent lack of interest in the future financial security of so many retirees. The board of trustees are certainly concerned to the point of suggesting a lawsuit in an attempt to get a court order commanding the central government to “pay-up” the $100 million or so that it owes the Fund. That should tell you something about the future solvency of the Fund and the train wreck ahead if something isn’t done. To my knowledge the filing of a lawsuit has yet to occur and is a last resort after so many pleas to the central government to adhere to its financial obligation to the retirees and pay the employer’s contribution to the Fund. Turns out such requests have achieved about as much results as that of “beating a dead horse”—which is to say, no results.

People ask me what they can do and I say “contact the board of trustees and tell them how you feel about a lawsuit—and whether or not you support such action by the board.” I would imagine they would appreciate hearing from retirees and those paying into the Fund who have yet to retire but anticipate doing so if they don’t get hit by the number 10 bus and pass on to glory long before their time.

As regards the medical and health program, it is well known that the central government wants to divest itself of all obligations by transferring the program to the private sector. In the meantime, since the central government hasn’t been paying its full contribution, one wonders if the trustees have been taking money that should remain in the Fund as investments and paying the central government’s share of the plan’s health coverage premiums? If so, one would hope that the government’s consultant attempting to engineer this transfer will not fail to include this reimbursement to the Fund in any contract that may eventually develop. Perhaps the private firm (whoever it may be) will take legal action to collect.

While the plan was created by law and presumably empowered Retirement Fund trustees with the authority to transfer it to the private sector—the law has not been challenged to my knowledge and thus is open to question as to whether such authority can be legally upheld. The Legislature can pass all the laws it wants but until a law is challenged and upheld by the court you don’t know whether it will stay on the books or not.

In conclusion, I can’t resist modifying and adapting a comment by Francis Keppel (1916–’90), Dean of Harvard’s Graduate School of Education and later U.S. Commissioner of Education (1962-’65) when he opined, “Education is too important to be left solely to the educators.” Here’s my modified version of Keppel’s astute observation, “Retirement Fund and Health Plan decisions are now too important to be left to politicians.”

Since it’s the retirees’ money and their health plan that’s being considered for transfer, in my judgment all members of the plan should have a voice in any recommended transfer to a private entity. It may be a good idea; I don’t know at this time. Otherwise, if not, the risk exists for a class action lawsuit. After all, such participation by those most effected in the final decision is a classic example of self-government and democracy in action. N’est-cé pas?

(The author is the self-appointed Vice President, CEO of the National Society for Bitching to Improve Conditions in the United States and all its Possessions, Territories, Commonwealths & Assorted Appendages. Kim Sook Muck, Treasurer.)