The NMI Retirement Fund\u2019s unfunded accrued liability has reached some $517 million, with a large portion of it owed to its Class II retirees and beneficiaries.<\/p>\n
In a report presented during yesterday\u2019s NMI Fund\u2019s investment meeting, Daniel McLellan, associate principal of Mellon Financial, said that total accrued liability of the Fund as of Oct. 1, 2003 totaled $902.6 million but its valuation assets only reached $385.7 million.<\/p>\n
Accrued liabilities refer to obligations for active members, inactive members including contributions held for terminated employees, and retirees and beneficiaries.<\/p>\n
Liabilities for Class II members\u2014those who became members before 1989\u2014totaled $651.2 million, while that for Class 1 members\u2014those who became members after 1989\u2014totaled $251.5 million.<\/p>\n
Based on its asset valuation ($385.7 million), $211.9 million would go to Class II members and $173.8 million to Class I members.<\/p>\n
As of Oct. 1, 2003, unfunded accrued liabilities for Class II members totaled $439.3 million and $77 .7 million for Class I.<\/p>\n
The Fund has nearly 8,000 members.<\/p>\n
McLellan noted that under the setup, retirees under Class II are driving up the cost at $506.4 million, while under Class I retirees\u2019 payment amounts to $54.5 million.<\/p>\n
Class I active members are the ones bringing the price up at $192 million, he said.<\/p>\n
\u201cThe government pays [only] 4.7 percent of the cost for Class II while under Class 1, the government pays more at 11.7 percent of the normal cost,\u201d said McLellan.<\/p>\n
The normal cost, defined as the portion of the total cost of future benefit assigned to the current year, totaled $26.3 million, with the government paying 10.5 percent of it, amounting to $15.9 million and the employees paying 6.9 percent or $10.4 million.<\/p>\n
The government currently shoulders 24 percent of the retirement contribution of government employees. Class 1 members contribute about 6.5 percent of their salary to the Fund while Class 2 or the \u201cold members\u201d remit about 9 percent of their salary to the Fund.<\/p>\n
McLellan noted that the Retirement Fund has been successful in controlling its liabilities. He said a comparison of 2002 and 2003 actuarial studies would show that annual government contributions went down by $3 million from $58.1 million in 2002 to $55.3 million in 2003.<\/p>\n
He credited this to the Fund being \u201cthe most proactive group [in the region]\u201d and for getting \u201cnice return and increased asset.\u201d<\/p>\n
McLellan said that the continued upswing in the marketplace would help improve the Fund\u2019s standing.<\/p>\n
He encouraged the Fund to continue its diligence in trying to control its liabilities. He said the unfunded liabilities would turn worse if the Legislature passes laws giving away benefits that are actually not funded.<\/p>\n
\u201cYou just can\u2019t give away funds without collecting [in the first place],\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
The KRNM radio station on Saipan is still running reruns and is not sure when they can resume live broadcasts of 90 percent of their shows on radio, as the satellite that provides them the signals remain offline. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-87324","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/87324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=87324"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/87324\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=87324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=87324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=87324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}