‘Govt wants to settle Fund debts’

For the second day today, Gov. Juan N. Babauta is meeting with NMI Retirement Fund officials to discuss possible settlement of the central government’s huge debt with the agency in employer’s contribution.

“We will meet again with the governor and Finance and Budget officials today to talk about funding availability,” said Fund administrator Karl T. Reyes yesterday.

Press secretary Peter A. Callaghan said that Babauta met with the Fund officials yesterday morning.

“They requested that we meet again. The governor will call in the Department of Finance and Budget and Management,” said Reyes.

Reyes said the administration’s move to meet with the Fund “is an indication that they’re prioritizing the Retirement Fund.”

Earlier reports said that only the central government is behind in paying the employer’s contribution to the NMI Retirement Fund. Its arrears now total $80 million.

Reyes said that autonomous agencies such as the Public School System, Northern Marianas College, Marianas Public Lands Authority, and Commonwealth Ports Authority, among others, pay on time.

It means that only those covered by the Department of Finance have fallen behind on the payment schedule.

These are the Governor’s Office and various departments, Legislature, Judiciary, and municipal governments.

From December 2001 to May 15, 2005, these agencies’ debts in employers’ contribution totaled $80.8 million.

In a report last April, Finance Secretary Fermin M. Atalig said that payments to the Fund were current until June 1998 when a series of outside events such as Asian currency crisis resulted in reduced government revenues—from nearly $250 million to $213 million or less.

Atalig said that the government paid the oldest liabilities first, covering FY 1998 to FY 2001.

The administration said the government had failed to pay for retirement in 2000 and 2001.

Atalig said the administration is now paying the FY 2002 liabilities. He said the government paid $18 million in FY 2004 and $8.8 million for FY 2005 ending in March.

Now, the administration said that it pays regularly—“enough to cover the checks for every government retiree.” Finance pays the Fund $850,000 every pay period for employer’s contribution.

The central government’s average annual contribution to the Fund totals $24.4 million while the autonomous agencies’ remittance amount to $15.2 million.

The government shoulders 24 percent in employer contribution. There are some 5,000 active members of the Retirement Fund.