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Fund’s investment portfolio still above $300M
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Posted on Dec 24 2008
The Retirement Fund’s investment portfolio is still above the $300 million mark, but the stock market remains very erratic, according to Fund board of trustee chair Juan T. Guerrero.
“It [stock market] rallies today and tomorrow it drops. We gain today and tomorrow the gain disappears. This is going on almost every other day,” Guerrero told Saipan Tribune.
The chairman said they can’t do anything with the stock market other than restraining the Fund’s belt and managing the assets more effectively.
“We’re watching the market react and taking a proactive action,” he said.
Guerrero said there are a lot of factors that the Fund needs to consider and one of that is the budget plan that was recently passed by the Legislature and is now before Gov. Benigno Fitial for his signature.
The budget, the chairman said, does not address in essence any appropriate funding level for the Retirement Fund.
This insufficient funding by the government, Guerrero said, makes it hard for the board because if they do not react they will, in effect, be allowing the depletion of the Fund’s assets.
“If we react to the Legislature, the administration thinks that we are playing politics. So we are caught [between] a hard spot and a hard landing,” he added.
In September 2008, the Fund reported that the market crisis wiped out about $30 million of the Fund’s investments, but after a few days it cut its losses down to $9 million.
The Fund’s investment portfolio was worth $418.75 million in July 2008. This represents about 42 percent of the Fund’s accrued liability, which amounts to $987.15 million.
The Fund’s assets have been on a downside since 2006. In that year, the central government stopped contributing to the pension program, forcing the Fund to liquidate assets to make pension payments.
