Fitial wants court proceedings in Fund issue suspended

Gov. Benigno R. Fitial asked Senate President Pete P. Reyes and House Speaker Arnold I. Palacios yesterday to join him in writing a letter to the NMI Retirement Fund board of trustees to consider an out-of-court mediation, but Fund board chair Juan T. Guerrero separately said the parties in the ongoing court proceedings are “way past the negotiation stage.”

The Retirement Fund sued the government over its failure to remit required employer contributions to the pension system. Phase one of the hearing began in April, but Superior Court Associate Judge Kenneth Govendo has yet to decide how much is owed by the government to the Retirement Fund.

In separate interviews yesterday, Reyes said he supports the idea, while Palacios said the House leadership has yet to decide on the governor’s request today.

“I feel the court would rather see the two parties trying to mediate the issues, to solve the problems, than go to court,” the Senate president said.

He added that with the Executive and Legislative branches working toward mediation, they hope the Fund’s board of trustees will also support the idea.

“I believe the idea is for the chairman of the Retirement Fund board to write to the court—on behalf of the Fund, the Executive Branch and the Legislature—to suspend the ongoing court proceedings and work things out by themselves with the help of a mediator,” he said.

The chairman of the Fund board of trustees, Juan T. Guerrero, in an e-mail, said what the governor is asking is “not possible.”

“That is not possible as any deviation from the court proceedings would not be in the best interest of the Fund. We are way past the negotiation stage. The court proceeding is for damages confirmation. I am not sure why mediate now? It appears that the administration just realized that the government liability is bigger than the annual budget,” Guerrero said.

Government lawyers in the case have said the government owes the Retirement Fund $213 million, while the Fund said it’s $215 million.

Press secretary Charles P. Reyes Jr. said the governor is exploring all possible options, including mediation, to address the Retirement Fund issue.

He said the Fitial administration “will continue to engage the Fund, the Legislature and the public in finding solutions to appropriately resolve this very pressing financial matter for the Commonwealth.”

“The governor will work with all parties to find workable solutions to a very difficult problem. …It should not be surprising that the governor would meet with the Fund and the Legislature to work on this issue,” he added.

Fitial’s meeting with Reyes and Palacios came a day after the governor appointed two new Fund trustees: Adelina C. Roberto and Francisco P. Rosario.

The governor’s nominations require Senate confirmation.

Guerrero said the Retirement Fund was “kept in the dark on the new appointments.”

He, however, said he is “confident that Ms. Roberto and Mr. Rosario would be contributing appointees…But other than Juan Lizama’s resignation, the Fund is unaware of any member stepping down.”

Press secretary Reyes said the appointment letters were sent to Roberto and Rosario on Tuesday, and to the Senate yesterday.

Meanwhile, the NMIRF Working Group chaired by Rep. Ray N. Yumul has been fine tuning an omnibus bill that seeks to reform certain provisions of the Retirement Fund laws and regulations. At least $109 million in savings are expected to help prolong the lifespan of the Fund once the yet-to-be-filed omnibus bill to help the pension system becomes law.

Among other things, the omnibus bill is expected to reduce the Retirement Fund’s unfunded liability, now at over $549 million.