‘Don’t touch our money’

That’s how retirees summed up their sentiment on the proposal to have the NMI Retirement Fund write off the $123 million debt owed by the government and lend $40 million to the Commonwealth Utilities Corp.

The Fund’s Finance and Investment Committee held a public meeting Thursday night to discuss the Defined Benefit Rescue and Reform Act of 2006, a bill submitted by the administration to the Legislature.

The meeting was attended mostly by retirees, although some active Retirement Fund members showed up. It lasted over two hours.

During the meeting, retirees expressed strong opposition to forgiving the government’s debt and providing CUC a new loan.

“My retirement pension is my life. I’m depending on it until the end of my life. If you allow CUC to borrow our money and it does not pay, who will pay for my pension? I want the Board of Trustees to continue to protect the Retirement Fund,” said a Mr. Taisakan, a retiree.

Former senator Ramon Guerrero, who has also served as an executive director for CUC, was skeptical about the government’s proposal.

“If you give the government a waiver, the administration will be laughing at you,” he told the Fund officials. “And if CUC is given a $40 million loan, do you think CUC will be able to pay the Retirement Fund. There is now way CUC can afford to pay $300,000 plus a month,” Guerrero said.

For his part, former House Speaker Heinz Hofschneider called on the Fund to “flat out reject” the proposal and point the administration to the Marianas Public Land Trust.

He said that the MPLT has money to invest and it’s time for the government to cash it in.

He also called on the Fund to review the current retirement benefits and think over the possibility of capping them. “Don’t let anyone get more than $70,000 a year,” Hofschneider said.

The Fitial administration was represented at the meeting by press secretary Charles Reyes, special assistant for management and budget Tony Muña, Department of Lands and Natural Resources Secretary Dr. Ignacio Dela Cruz, acting CUC executive director Tony Guerrero, and Coastal Resources Management director John Joyner.

Muña was given 10 minutes to speak, during which he gave the administration’s reasons behind the proposals.

“Those who attended mostly opposed the plan. They were, however, sympathetic to the situation of the government,” said Reyes.

The Defined Benefit Plan Rescue and Reform Act of 2006 seeks to forgive the $125 million in employer share contributions that the government owes the Retirement Fund and its members.

The bill would also require the Fund to float a $40 million revenue bond for the cash-strapped Commonwealth Utilities Corp., at an annual interest rate of 7.5 percent.

In addition, the proposed legislation seeks to implement an “employer contribution holiday” for the remainder of fiscal year 2006. During this period, the governor may suspend payments to the Retirement Fund.

In an earlier interview, press secretary Reyes tried to dispel what he described as “myths” about the administration’s proposal, saying it would actually be beneficial for both the retirement agency and the community.

He said that the 7.5-percent interest rate proposed by the Defined Benefit Plan Rescue and Reform Act of 2006 is a reasonable rate that many financial institutions are not offering.

“All we’re asking is for the Retirement Fund to shoulder the costs of revitalizing CUC and get a return on top of that. This will put CUC in a far better position to address the power problem substantially. This will also help the economy, which is dependent on CUC’s services,” Reyes had said.

He had also assured retirees and active members that the administration would repay the $40 million that CUC would be borrowing from the Fund.

“The CUC is under new management. The Fund will get its money back,” he maintained.

Furthermore, Reyes said the debt writeoff was simply an “accounting arrangement” that would put the government in a better position to pay employer contributions to the Fund later on.