End of your retirement pension, Fund’s defined benefit plan

Editor’s Note:[/B] The following is the conclusion of a two-part series. The first part was published in yesterday’s edition, April 23, 2008. Access it at the Archives Section of www.saipantribune.com.[/I]

Continuing with yesterday article and for those Retirement Fund members who might be interested, I want to share with you some indication of how to measure the period of time you might have if you were to outlive your pension. Google “Social Security Life Tables. Then select “Male” or “Female” whichever the case may be. Match your age listed in the first column with the corresponding “years remaining” in the column depicting the life expectancy of that particular age. The data presented is valid for the year 2004*, but it can be used to make a point for this year (or you can back track your present age by four years to 2004). For example, in 2004, a male 50 years of age would have on average 28.46 years of life remaining or to age 78.46 years or to the year 2032. A female of the same age in 2004 would have 32.25 years remaining. In every population throughout the world over, females generally live longer than males—God made it that way. The tables will show this.

Then estimate how many years you could spend without a pension after the expiration of eight years of retirement payments after which the Fund may be exhausted. Or, if you prefer, select one of the several other periods that Buck Consultants will present at the briefing. Personally, I think eight years is a realistic term before the death of your defined benefit plan. Do you consider my opinion to be that of an alarmist? You should.

It’s really very simple—you will not be able to receive your pension if the Fund has no money and if you think the central government or the U.S. will step in and pay your pension, I have a lot of stuff rusting out back in the weeds to sell you at a good price.

Certainly no one knows what the future will hold, not with respect to the life of the Retirement Fund or the duration of your own life based on these actuarial statistics. You could reach the age shown on the data table and live beyond to the “Second Coming.” Or you could get hit by an empty tour bus or succumb before your time to the ravenous vultures of the air. So if you think you are nearing your age number on the life expectancy tables, don’t sell the farm and give the dog away. The information is simply a benchmark and only potentially indicative of all the others your age who have lived a normal life free of fatal accidents and debilitating injuries. If you are a smoker then that could reduce your remaining years also.

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Still another matter for those interested in the future of the Fund concerns the delay in following up on the lawsuit the Fund brought against the central government more than six months ago (Civil Action No. 06-00367).

The Fund listed no less than 10 causes of actions against the NMI’s central government. I understand that resolution of the issue was postponed and still remains unresolved. Why is that? What happened to the canon of a swift trial?

All retirees and active members must realize that the longer the court delays in rendering a judgment in this vital matter the more money the members stand to lose by failure to collect from the government what is due the Fund and thus the members—and I mean the loss of millions of dollars which could be invested in interest bearing securities. What possible reason could justify such a lengthy delay in resolving this vital issue. What could possibly be gained by such a protracted suspension?

As a former Fund administrator pointed out in an article several years ago (Dec. 7, 2004), Fund records indicated the highest pension released was $150,000 a year to a retiree who is a former member of the judiciary. That amount of money is equal to paying six retirees annual pensions of $25,000 each. With judges making that kind of money if they so chose they could establish their own retirement program independent of the NMI’s retirement program, which is a train wreck waiting to happen anyway.

As the author and researcher of more than 45 “op-ed” retirement pieces published intermittently over the past seven years starting in 2000, I wrote the essays to alert members of the dire consequences certain to occur as a result of the central government’s failure to meet its financial obligation to contributing members. I sent unsolicited copies of my independent analyses to one of the Superior Court judges hoping to provide the court a measure of economic background concerning several issues of concern to retirees as viewed—not only as one of their own—but also from the perspective of an economist. Having been previously qualified on several other occasions by more than one judge as an expert witness on economic matters, I thought at least a portion of the report contents might be of assistance to the court. Turns out they were apparently unappreciated and probably construed as being biased.

While I was not present at court at the time of the initial presentation by the plaintiff (the Fund), I was told by an individual who was in attendance that the presiding judge threw my analyses in the trash bin, only to recover it later with the remark that, “If anyone wanted to read it, it would be available at the court for that purpose.” Upon learning this I was quite pleased that my report didn’t wind up in the restroom for an alternate use—at least I hope not. So much for my good intentions. At least the courtesy of a thank you note would have been appreciated.

So, for those interested in the point of view of an economist regarding the future of the Fund, either check with the court or go to the Tribune’s website search bar at the top of their page and type in “William Stewart Retirement Fund” where you can read several articles posted there and decide for yourself if they have any merit.

Meanwhile, write the time and date of 10:30am, Friday, April 25, on the wall to remind yourself to attend the briefing at the Legislature and hope they don’t change the date and fail to announce the change.

*Note: Statistical information is not yet available for the year 2008, but the data, which are available, are close enough for useful approximation. So if you are interested, consult the Social Security Life Tables, find your age and the corresponding years remaining of life expectancy opposite your age. Then determine how old you will be in eight years time or by the year 2016. The remaining years will be the number of years you may have to live without your retirement pension if the central government continues to fail to meet its employer contributions to the defined benefit plan and other payments to the Fund.