Fund’s opportunity losses increasing due to delay of repealer

The delay in the enactment of the bill that would repeal the Beneficiaries Derivative Act is causing the NMI Retirement Fund’s opportunity losses to go higher as a result of its continued absence from the international investment market.

Pursuant to law, the Fund is not authorized to invest its assets and portfolio without the advice of an investment expert or consultant.

Although he could not immediately quantify the opportunity loss, board chair Sixto K. Igisomar believes that the impact on the Fund’s investment is “significant.”

“We have yet to quantify that number. All I can say is, the Fund has lost the opportunity to gain something because we’re out of the market,” he said.

All of the Fund’s money managers and investment consultants-including Wilshire Associates and Buck Consultants, the agency’s financial adviser and actuary-terminated their contracts with the agency soon after the passage of the derivative law in September this year. That law allows retirees to sue these service providers on behalf of the Fund if the board refuses to take such action.

The en masse exit of these financial advisers forced the board to liquidate the Fund’s assets, put them in mutual funds and eventually have them transferred to the CDARS program, or the certificate of deposit account registry service.

It is the board’s intent to put all of its portfolio in the program until a new investment adviser is hired. However, until the derivative law is repealed, no investment consultant wants to transact business with the Fund.

Igisomar estimates that the Fund’s current portfolio is valued at $261 million.

Pleased with Senate passage

Igisomar was pleased to learn that the Senate passed yesterday the repealer bill, which now goes to the House for action. He is optimistic that the Fitial administration will stand by its promise to pass the measure.

Pending the actual signing of the repealer bill into law, he said the Fund will continue to advertise its need for an investment consultant and actuary.

Igisomar also lauded the Senate’s passage of a measure that will allow the adjustment of Group Health Life Insurance rate based on available government resources, as well as the transfer of the health insurance program from the Fund to the Commerce Department.

Igisomar said the Fund also wants the Workers Compensation Commission to be transferred to other government agencies so that the Fund can focus all its efforts on how to save the struggling pension program.