NMIRF CHIEF ASKS TENO: Don't hire ex-government employees
As a result of the increase in number of employees who are seeking refunds of their contribution to the NMI Retirement Fund, Administrator Juan S. Torres has asked Gov. Pedro P. Tenorio not to take them back if they want to return to civil service to discourage people from leaving the government service early.
In 1996, over $20 million was refunded by the Fund to its members and $5.5 million in 1999.
Mr. Torres has expressed alarm on the destabilizing effect to the financial condition of the Fund if a huge number of employees would seek refunds all at the same time. “Can you imagine if everybody decides to take back their contribution and retire early? This agency may just go down,” he said.
Under the present set-up, only those who have rendered less than 10 years in government service can still take back their contribution to the Fund.
The Fund chief asked the governor to help the agency in discouraging people from resigning and taking their money out by not allowing them to avail of a government job again.
“We may be forced to liquidate our investments to pay our annuity if things do not improve,” said Mr. Torres.
Mr. Torres is hoping that the CNMI government pays its unpaid contribution to the Retirement Fund soon, which is over $25 million so that it can be used to pay for its operations.
Based on the Fund’s financial report as of end-1999, total contribution collected by the agency amounted to $7.993 million.
However, the Fund paid $9.404 million in pension and refunds and $534,000 in other general and administrative expenses. As a result of the huge cash outflow against revenue, the Fund has been short of $1.945 million for the last three months. The average monthly cash outflow on refunds for the last three months totaled $456,000.
NMIRF has total cash available amounting to $2.705 million at the end of 1999, enough to cover pension cost for the entire month of January 2000.
Mr. Torres said the revised projection he made showed that the Fund still has enough money to carry out its operation until April 2000.
Managing the contributions of the 5,000-strong government workforce for the last 20 years, NMIRF spends at least $3.2 million every month. Of this, some $2.7 million goes to pensions of government employees while the rest are spent on salaries and administrative expenses.
Local investments earned $514,000 and the stock market portfolio appreciated $28.958 million in net realized and unrealized gains as of December 1999. The total invested asset is valued at $384.613 million, an increased of 9.14 percent from last year.
Due to the effects of Asia’s financial crisis, the Fund’s investment in the region’s stock market which is the secondary source of its annuity payments has been greatly affected.
