CRA: Executive order needed for Fund problems

Commonwealth Retirees Association board chair Lorenzo Leon Guerrero-Cabrera will urge Gov. Benigno R. Fitial to issue an executive order that will help identify means to resuscitate the dying Commonwealth pension program.

A formal letter will be drafted, he said, with a specific request for Fitial to issue the executive order that will bring everyone concerned to the table to thresh out solutions to the Fund’s condition. A board resolution with the same intention may also be endorsed.

“I will endorse [to the full board] maybe another solution…and I will submit a letter to the governor to strongly urge him to issue an executive order that would require the membership of the administration and the Legislature to work together to come up with a solution [to the Fund’s problems]. With the recent hiring of Heinz Hofschneider as consultant for the board, I don’t think he will be able to come up with everything unless everybody is on the same page,” said Cabrera.

He disclosed that the endorsement of a new pension obligation bond for the Fund may be in the offing, which may get the full support of the association. The first bond attempt failed to secure enough votes in the last election.

Speaking in his personal capacity as a retiree, Cabrera expressed willingness to “make sacrifices” if this will help save the pension program, even if it means cutting his pension checks.

Based on Fund records, the pension program has 3,186 beneficiaries: retirees (2,414); surviving spouses (574); and surviving children (198). Total payouts amounted to $63.1 million last fiscal year.

Cutting pension and benefit amounts across the board was among the measures identified to help save the Fund. Another option is putting off the payment of benefits to members to minimize and eventually avoid drawdowns from the Fund’s investments.

According to Cabrera, once these measures are implemented, these will give the CNMI government the ability to float the pension obligation bond because the deferred payments and increased contributions will be used to repay the bond.

He believes that the current 61 percent contribution rate being imposed by the Fund on the cash-trapped government is “too high.”

“No way the CNMI government can pay the 60 percent rate. For me it’s irresponsible to force the government to shell out that kind of money and just pay the Fund. How about the hospital [and] public safety?” said Cabrera.