Fund backs concept of SS bill but calls for expert analysis

“We support the concept of transitioning to U.S. Social Security and respect that it is a policy decision. But for a policy change of this magnitude, we respectfully recommend that thorough analysis and review by a qualified expert be obtained,” he told Saipan Tribune yesterday.

An expert’s advice, he said, will fully illustrate the bill’s impact not just on the Fund and its members but also on the finances of the Commonwealth government and the entire CNMI.

For Villagomez, a plan to repair and reorganize the Retirement Fund must be done in a comprehensive manner. “The system is too fragile to survive a piecemeal approach,” he added.

The Fitial administration, which placed the Fund under emergency status, wants to transfer the pension plan’s active members to the U.S. Social Security Administration in order to rid the Fund of increasing members under the defined contribution plan.

Villagomez also expressed the agency’s support for the pension obligation bond initiative that recently passed the House of Representatives. This despite admitting that floating a bond may be a slim chance for the CNMI due to its poor credit standing and other factors.

“But we must emphasize that, though the likelihood of the CNMI floating a bond might be slim to none at this time, it is worthwhile to have it available as an option for when it becomes feasible. If we wait for all the lights to turn green before we head to town, we will never get there,” he said, adding that they are supporting this as a first step toward making the pension obligation bond an option.

Villagomez believes the pension obligation bond is not a cure-all. He said it is only one piece of other efforts that must be taken to address the financial situation of the pension program.

The POB initiative was drafted to allow the government to float a bond so it can pay the Fund. The central government’s unpaid employer contribution to the pension program has ballooned to more than $230 million.

Public opinion on the pension obligation bond initiative is so far split among pension members and retirees. Opponents of the idea argue that floating a bond will create an additional obligation that will hostage future generations.

This view, according to Villagomez, can only be true if the obligation to paying thousands of beneficiaries does not already exist. “But future generations have already been committed to these obligations ever since our people amended the Constitution to include Article 3 Section 20,” he explained.

Villagomez’s contract as administrator is expiring this end of month. Yesterday, he vowed to provide all the help he can for the Fund.

“I’ll do what I can to help, but the operations of the Fund will be in very good hands with the team in place now,” he told Saipan Tribune.