Nearly 400 withdraw Fund contributions

The NMI Retirement Fund reported a significant increase in the number of individuals who withdrew their contributions from the pension program last fiscal year.

Fund records show that a total of 389 members refunded their contributions in fiscal year 2011—from Oct. 1, 2010, through Sept. 30, 2011. This is a 33-percent increase over fiscal year 2010, which had 292 members who refunded their contributions—a difference of 97 members.

Based on the agency’s audited financial statements for fiscal year 2010, the Fund paid out a total of $3.363 million in refund contributions.

At a recent board meeting, Fund administrator Richard Villagomez disclosed that the agency paid out a total of $5.7 million in refunds in fiscal year 2011—or from October 1, 2010 through Sept. 30, 2011. This is a difference of $2.4 million from fiscal year 2010’s $3.3 million, which translates to a 73-percent increase.

According to Fund deputy administrator Esther Ada, refunds are made for a variety of reasons. Unfortunately, she said, when employees withdraw, they do not need to state a reason for withdrawing their contributions.

Fund board chair Sixto Igisomar described the withdrawal of contributions as “never-ending” in this time of economic difficulty, government austerity, private sector layoffs, and other challenges.

“Austerity now is not funny and everybody is looking at options so withdrawal of contribution [from the Fund] is inevitable,” he said.

Igisomar concedes that the number of refunds may continue to rise in coming months particularly because of a pending bill at the Legislature, House Bill 17-226, which would allows active members of the defined benefit plan to withdraw their contributions without any severance of employment or penalty.

The Fund earlier described the bill as a “death blow” to the agency because, if enacted into law, it will allow all 2,996 Fund members to withdraw their contributions.

Igisomar said the board has made it clear to the Legislature that, although refunds may be advantageous to the Fund in the long term, “what we need for now, in the short term, is cash flow.”

Based on Fund records, the agency paid out the following refunds to its members in 10 years: 2000, $3.9 million; 2001, $3.2 million; 2002, $4.1 million; 2003, $3.5 million; 2004, $3 million; 2005, $2.9 million; 2006, $4.5 million; 2007, $5.2 million; 2008, $5.5 million; and 2009, $4.8 million.