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Emergency payment for pensions—again
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Posted on Jun 03 2006
The NMI Retirement Fund said it has again withdrawn funds amounting to $1.3 million from its emergency account to pay the retirees’ pension Tuesday last week.
This was the fourth time for the agency to tap its reserve account for pension obligations this year.
In the middle of May, the Fund took some $1.5 million from the same account to settle the government’s pension liability to some 2,000 retirees. The Fund pays out $2.3 million for pension a month.
Fund administrator Karl T. Reyes said the board authorized the last drawdown of $1.3 million for pension payments last week.
The central government has failed to give its share of retirement contributions to the Fund since April due to a lack of available funding.
The government has been required to pay 36.7 percent in employer contribution since last year, but due to the current fiscal crisis, it could only meet the old rate of 24 percent.
Autonomous agencies like the Public School System, Ports Authority, Visitors Authority, and others still pay their employer contribution dues, the Fund said.
The central government has incurred more than $85 million in arrears with the Fund over the years for untimely remittance and outright nonpayment of employer share.
The Fitial administration has recently submitted two bills to the Legislature to address this problem.
One bill asks the Fund to write off $124 million in unfunded liability, which includes the $85 million arrears, while the other one aims to reduce the government’s employer share to 4 percent and raise the employees’ contribution to 10 percent from 6.5 percent and 9 percent.
Further, the administration aims to convert the current defined benefit plan to defined contribution plan to get rid of accumulating future unfunded liabilities.
