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Fund taps reserve account for $1.5M pension checks
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Posted on May 15 2006
For the third time this year, the NMI Retirement Fund board has decided to withdraw again from its own reserve account to pay off retirees.
Fund administrator Karl T. Reyes said the board authorized the drawdown of $1.5 million Thursday last week to meet the pension obligation yesterday.
He said the $1.5 million was also used for other items such as payment for refund and vendors amounting to about $300,000.
“A huge portion of it goes to pension,” said Reyes.
He said the reserve account is money derived from the Fund’s investments.
Reyes said the Fund board authorized tapping the reserve twice in April. “This is our third time,” he added.
He said the Fund spends $2.3 million for pensions a month.
The central government, meantime, is obliged to pay $1.3 million per pay period, but in the past, it could only manage to remit less than a million. Lately, the government could not remit its contribution at all for lack of funds.
The central government’s arrears with the Fund in employer contributions total over $85 million.
Autonomous agencies, according to the Fund, are current with their employers’ contribution.
The government shoulders 24 percent of each employee’s retirement contribution.
Meantime, the Governor’s Office has submitted a bill asking for the writeoff of some $124 million in unfunded liability with the Fund, which includes the $85 million arrears.
