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‘9 firms keen on DC plan’
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Posted on Nov 12 2006
At least nine companies have expressed interest to submit proposals to become the third party administrator of the NMI Retirement Fund’s new defined contribution plan, according to Fund administrator Mark Aguon.
Aguon said Thursday that nine companies have inquired and picked up copies of the Request for Proposal for the plan’s TPA.
“We’re getting interested companies. They’ve got the specs for RFP. We are just clarifying the questions they have,” he said.
None of the nine companies has submitted a proposal for the project yet.
Aguon said all potential proposers have turned in several questions for the Fund to clarify.
The companies are most interested to know how many people would transfer to the new program.
“They want to know how many will transfer to the defined contribution plan,” said Aguon
The administrator said there are less than 3,000 members of the existing defined benefit program who are eligible to transfer to the new plan.
And, although they may be eligible, there is no certainty whether they would actually shift to the defined contribution plan, which is essentially a savings plan.
Eligible members are those who have less than 10 contributing years with the defined benefit plan.
Public Law 15-13, known as the Defined Contribution Plan Act of 2006, requires all new CNMI government employees hired on or after Jan. 1, 2007, to be enrolled in the defined contribution retirement plan.
The Fund said it hopes to have selected a third party administrator for the defined contribution plan by next month.
The plan’s RFP will close by end of this month.
Based on its RFP, the Fund said it will “contract with a qualified private entity to provide record keeping, benefits payment, investment arrays, and other functions necessary for all aspects of a third party’s administration of the plan.”
The defined contribution law does not identify funding for the implementation of the program.
The government aims to save millions from the implementation of the defined contribution plan, which would reduce its contribution rate to 4 percent from as high as 37 percent, and increase the employees’ contribution share to 10 percent from 6.5 percent.
