The NMI Retirement Fund board of trustees will meet today to discuss strategies and options as it prepares to challenge the newly signed Beneficiary Derivative Act in court.<\/p>\n
Retirement Fund insiders told Saipan Tribune yesterday that court action is the only way the Fund could retain the services of its money managers and investment consultant.<\/p>\n
Sources revealed that the Fund\u2019s new investment consultant, Wilshire Associates, has already sent the Fund a letter informing it of its decision to pull out its service and terminate its contract with the Fund. Wilshire cited the enactment of the controversial derivative act as the impetus behind its decision.<\/p>\n
The new law, which Lt. Gov. Eloy Inos enacted Tuesday, allows beneficiaries of the retirement fund program to sue on behalf of the Fund if the board refuses to bring such legal action.<\/p>\n
Saipan Tribune learned that the Fund asked Wilshire yesterday to reconsider its decision, promising to \u201cdo something\u201d to retain Wilshire\u2019s important services.<\/p>\n
Fund insiders said that Wilshire initially agreed to stay on if the new law is challenged in court. A decision must be made on the matter today, however, as failure to do so would result in the termination of Wilshire\u2019s contract.<\/p>\n
Besides Wilshire, money managers have also expressed a similar decision, Fund sources said. Fund officials and trustees were reportedly meeting since Tuesday, discussing the law\u2019s impact. <\/p>\n
The Fund earlier said that if Wilshire pulls out, no firm will be willing to contract with the Fund to manage its assets. That would result in the forced liquidation of the Fund\u2019s portfolio. The estimated opportunity cost of being out of the market for an extended period is $9 million per year.<\/p>\n
Board of trustees chair Sixto Igisomar declined to comment yesterday when asked for comment but confirmed the board\u2019s meeting today.<\/p>\n
Igisomar had earlier announced that Gov. Benigno R. Fitial does not support the beneficiaries derivative bill and had promised the Fund that he will not sign it.<\/p>\n
The measure passed both houses and was transmitted to the governor on Aug. 16. By law, the governor had 45 days\u2014or until Sept. 24\u2014to act on the bill. In the case of his disapproval, the Legislature has 60 days to override the governor\u2019s veto. <\/p>\n
Inos signed the bill on Tuesday on behalf of the governor, who arrived from an off-island trip Monday night. Saipan Tribune learned that Fitial was only made aware of the signing of the law when informed by Fund officials Tuesday.<\/p>\n
Inos, in his transmittal letter to the Legislature, indicated that contrary to the Fund\u2019s position, the number of litigations and cost of doing business is unlikely to rise as a result of the measure. He said the legislation has measures in place to prevent frivolous claims.<\/p>\n
[B]Another bill against the Retirement[\/B]<\/p>\n
Sources disclosed yesterday that a new bill that is expected to be introduced soon in the House will allow \u201cunlimited\u201d withdrawals by defined contribution plan members.<\/p>\n
Proponents of the measure, according to sources, have already informed their colleagues of the bill\u2019s introduction. The plan is to remove the 15-year restriction on the withdrawal of contributions.<\/p>\n
As of yesterday, no bill pertaining to the retirement program has been pre-filed. <\/p>\n
The pension fund\u2019s investment portfolio is currently valued at just $271 million.<\/p>\n
Fund officials earlier said the depletion of the investment fund was mostly a result of laws passed by the Legislature that gave generous benefits to members and suspended the government\u2019s employer contribution to the Fund for 18 months, among others. <\/p>\n
To fulfill its pension obligation to members, the Fund draws down about $75 million a year from its investment funds.<\/p>\n","protected":false},"excerpt":{"rendered":"
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