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Fund: Administration won’t settle arrears
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Posted on Mar 29 2006
Citing lack of funds, the Fitial administration has told the NMI Retirement Fund that it would only pay for its own obligation in employer’s contribution, but not the central government’s arrears totaling $85.5 million, according to Fund administrator Karl T. Reyes.
“They are not paying the arrears. They came here and told us that they only want to pay their [own] obligation,” he said.
He said both the Department of Finance and the Office of Management and Budget have made this matter clear to the Fund.
“The previous administration was paying everything. There’s delay but their payments covered both the arrears and their current obligations,” said Reyes.
He expressed concern that the non-payment of the outstanding debt would later result in increased contribution rate.
The Fund had increased the employer’s contribution rate last May from 24 percent to 36.7 percent as advised by its actuarial consultant. The increase was necessary to ensure the Fund’s survival, it said. Right now, however, no government office is able to comply with the increased rate.
Reyes said the government continues to pay at 24 percent rate.
Meantime, he said that the central government has been paying an average of $900,000 every pay period since January this year.
The government has to pay $2.3 million per pay period to settle its pension obligations.
