Gov. Benigno R. Fitial disclosed this during a recent press briefing for the Kagman Community Health Center in reaction to concerns that he may not keep Richard Villagomez as Fund administrator.
Villagomez’s contract will expire next month and, based on a recent letter he sent the Legislature, he hinted that this contract may not be renewed.
“I haven’t started the plan how the new Fund administration will be,” Fitial said when asked if he will retain Villagomez and the services of the Fund’s lawyers once the agency is transferred under the Finance Department.
Fitial pointed out that the Fund’s transfer to Finance will not take effect while the bankruptcy case is still in court.
A bankruptcy filing stops all legal proceedings, including implementation of the governor’s executive order placing the Fund under emergency.
The governor said he will wait for the formal dismissal of the case before any action is taken on the Fund situation.
“The case is now under the control of the bankruptcy court. Until and unless the court dismisses the case, you can’t do anything and that has to be understood because a lot of people don’t understand that,” Fitial said.
In his letter to the Legislature, Villagomez recommended several ways on how Fund issues will be addressed. Among them is the establishment of a separate trust account under the Department of Finance to ensure that Fund assets will not be used for other purposes other than to pay for members’ benefits.
According to Fitial, if this is what the retirees want, they should share it with him for consideration.
The government owes the Fund over $320 million in unpaid employer contributions, resulting in the depletion of the Fund’s assets.
Fitial reiterated that the government currently has no money to meet this obligation. He said he’s ready to go to jail if retirees so wish.
The governor reminded that a budget is only a planning tool for the government. The actual money, he said, still depends on collections and revenues generated.
As a solution to the ongoing crises at the pension agency, Fitial identified the transfer of active members to the federal Social Security Administration, which he said is not only cheaper but more secure because it has no unfunded liabilities.