Fund’s assets in cash account now at $105 million

A total of $105 million in the NMI Retirement Fund’s assets has already been transferred to the certificate of deposit account registry service, or CDARS program, according to administrator Richard Villagomez yesterday.

He told Saipan Tribune that the assets’ transfer to CDARS will continue until the board of trustees officially adopts a decision to stop it.

The Fund earlier voted to liquidate all its investment assets and put them in cash accounts to protect them from potential market risks. This was due to the departure of its investment consultant, Wilshire Associates, in the wake of the enactment of the Beneficiaries Derivative Act in September last year. That law, seen as a potential liability that prompted the flight of the Fund’s money managers, has since been repealed.

Villagomez said the CDARS program is hitting capacity constraints to accept more money while they roll over existing placements that are maturing. The Fund, he said, may also be shifting to shorter maturities in anticipation of throwing the whole process in reverse.

As of Dec. 27, 2011 the Fund’s investment portfolio had a market value of $2576.7 million. The amount continues to drop due to the agency’s constant withdrawals to pay for the pensions of members.

Gov. Benigno R. Fitial signed into law last week the repealer of the Beneficiaries Derivative Act. Despite this action, Villagomez said the board has yet to meet to officially decide on what to do with its investments.

“The board has to formally approve to stop the liquidation/transition process and we anticipate this to occur while Wilshire is brought back onboard as investment consultant. In the meantime, we will continue to move but at a more tempered pace and to the extent that the CDARS program is able to accept,” Villagomez said.

Saipan Tribune learned that the maximum amount that can be accepted by the CDARS provider-First Financial-varies every week.

In an email to Saipan Tribune, Wilshire principal Maggie Ralbovsky said their legal department is still reviewing the newly enacted repealer law but confirmed that the company has renewed its business license in the CNMI.

The board of trustees earlier approved the issuance of a request for proposal for an investment consultant and actuary. Villagomez said that the board is expected to formally cancel this announcement very soon as a result of the repealer.

He said the Fund has already received communications from its former consultants and money managers indicating their intent to return and serve the Fund. He did not disclose the names of these companies.