The DBPR Reform Act of 2006

I believe it. Why?

First, let’s not forget the true issue we’re faced with: Our government is broke. Is the CNMI hurting? That’s an understatement. Is the governor doing his utmost to relieve this pressure? Like no other before him. Can the Retirement Fund help? Absolutely.

In question is the thrust to write off the government’s $124 million unfunded liability with the Retirement Fund, to suspend its payment of employer contributions this fiscal year, to tap $40 million revenue bond from the Fund to bail out CUC, and to stop funding the group health insurance program.

The Retirement Fund currently has $500 million in total assets. Incredible and congratulations! Bragging rights, indeed, by those officials in charge.

Now what?

In a single stroke, the governor can make whole again our suffering government. Unfortunately, as is happening all too frequently, there are those who, with blinders on and laboring in the past, stand against him. In this case the board chair and the administrator of the CNMI Retirement Fund.

The governor proposes, the Fund opposes. Bragging rights, indeed, but not helpful.

Why not?

Their swift response to the Defined Benefit Rescue and Reform Act of 2006, in a Tribune letter to the editor May 9, 2006, cast a glaring defect: both gurus-Reyes did not take the time or make the effort to adequately research the intricacies of the language in the bill. How could they? Their response is based on what was known to them—in the distant past—when money was flowing. They have never experienced the hard questions posed by a gutted economy and a governor who knows the solution of which they cannot see. In this time and place, their performance is suspect.

Money is nothing more than a tool.

Certainly, $500 million makes the board look good but it is still money unused, sitting in accounts making commissions for those holders and not the community, the CNMI, from whence it came. Like wall decorations. Inert.

It appears the board is more concerned with performance and their personal image than with service to the public, the true beneficiaries.

Without question, the current Retirement board has lost sight of that fact and the reason for their very existence: The implementation of the Fund since 1980 was to invest monies as a public service and for the overall benefit of the CNMI—not for the sake of accumulating monetary returns “forever and ever” as the board has mesmerized itself into believing.

I had to shake my head at the declaration by the gurus-Reyes that they would lose $63 million in 10 years interest from the $85 million in employer contributions. That, by mandate, the Fund has to be “self-sustaining” and wishfully accrue assets of “$1 billion by the year 2020.” Impressive goals. Assuming the CNMI doesn’t get flushed down the you-know-where in the mean time.

Time to wake-up.

You want more?

By failing to adequately research the language of the bill, to thoroughly comprehend its ramifications and to seek answers to shepherd along the intent of the bill, the gurus-Reyes instead have argued why they cannot support the Reform Act of 2006.

The legal ramifications and limitations of the bill? Go do your homework and find out where the parameters of the Fund’s obligation actually start and stop. Then quickly write another letter to the editor and detail for us readers why you were correct—or incorrect—in the first place.

No gains or increase in assets of the Fund? The gain is the survival of our community. The increased assets is the day after: families keep their jobs, investors return in greater numbers, and the CNMI is at last on the road to solvency.

That forgiveness would not make it happen? Forgive the intent of the bill? Lofty goals, indeed, but we’re not talking lofty goals here. We’re talking the survival of the community where those same believers of lofty goals live in. A billion dollars in the Fund’s bank while 75,000 people collect monthly food stamps? Heaven forbid.

If the gurus-Reyes are adamant in their convictions that the Reform Act of 2006 cannot be serviced by the Fund’s $500 million, or by their reluctance admit to not having a clue how to apply the assets, they should be removed. Find people who have the broader depth of higher-financing, and who have the competency to perform the Fund’s obligation to its proper end: servicing our community.

Governor Fitial has challenged the officials of the Retirement Fund with their fiduciary obligation to responsibly serve our community. It’s been done before, it can be done here.

Just do it.

Holani Smith
Tanapag, Saipan