Fund urges retirees to lobby against debt write-off, CUC loan bill

The NMI Retirement Fund has urged retirees and government employees to lobby their representatives in the Legislature if they oppose a measure that would force the Fund to forgive the government’s $123-million debt and lend $40 million to the Commonwealth Utilities Corp.

While maintaining that no official position has yet been made on the proposal, Fund officials said they would need the public’s help in order to fend off the administration’s plan.

“We ask for your help. Call on the members of the Legislature not to pass this bill and to try for some other way to get the government out of financial crisis. There’s nothing we can do if the Legislature passes this bill,” Retirement Fund chairman Joseph C. Reyes said of the Defined Benefit Rescue and Reform Act of 2006.

NMIRF Finance and Investment Committee chairman Oscar Camacho said that neither his committee nor the Fund had come up with an official position on the bill.

This despite public statements made by individual Fund officials, including Reyes and Camacho, against the measure.

“It’s better to defer payment and get paid later. But to outright write it off is almost imprudent on our part,” Camacho said of the proposed debt write-off. He also expressed concern on having only the “full faith and credit of the CNMI government” as the Fund’s only guarantee for the proposed CUC loan.

Meanwhile, NMIRF investment director Mark Aguon put his opinion simply: “If you’re a business and someone owes you money, you sue them. You don’t forgive the debt and give them more money. That’s our point.”

For his part, Retirement Fund comptroller Noel Soria described the bill as “an imprudent action.”

Antonio Muna, the governor’s special assistant for management and budget, presented the proposal before the retirees and Fund members Thursday night, in an effort to explain the plan and to assure stakeholders that their benefits would be protected.

According to Muna, writing off the $123 million only makes the debt a long-term liability, rather than immediate liability. The write-off gives the government more time to address the debt, he said.

He added that the Retirement Fund stood to earn $37.4 million in total interests over the proposed CUC loan’s 20-year life. He added that repayment was guaranteed, as the Retirement Fund would be paid first from CUC revenues—ahead of personnel and vendors.

However, Muna’s presentation was met with skepticism and opposition.