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FROM $27M MINIMUM ANNUAL PAYMENT IN 2015:
‘Govt should pay $30M in FY 2016’
An independent actuary has determined that the CNMI government should make a minimum annual payment of $30 million in fiscal year 2016, $33 million in fiscal 2017, and $45 million in fiscal 2018 to pay 75 percent of the NMI Settlement Fund members’ pension benefits.
Government payments in fiscal years 2014 and 2015 were fixed at $25 million and $27 million, respectively.
The settlement agreement in Betty Johnson’s class action that created the NMI Settlement Fund requires the CNMI to make minimum annual payments each year to pay 75 percent of the class members’ full benefits.
The Settlement Fund retained Milliman Inc. to provide an independent actuarial valuation of the Fund.
NMI Settlement Fund counsel Dean Manglona submitted to the U.S. District Court for the NMI on Wednesday the actuarial valuation report prepared by Milliman Inc.
According to Milliman, the minimum payment for the CNMI government is estimated at $44 million in fiscal 2019 if life expectancies are based on the mortality table used in the 2012 actuarial valuation of the NMI Retirement Fund.
The minimum payments, Milliman said, are estimated to decline by $1 million per year until fiscal 2024, resulting in a minimum payment of $39 million that year.
Minimum payments after fiscal 2024 will decline by $0 to $500,000 per year until fiscal 2031, resulting in a minimum payment of $36.75 million by then.
At that point, according to Milliman, the Fund balance is projected to be nearly exhausted and CNMI payments will equal the benefits and expenses paid by the Settlement Fund.
“If we assume improved life expectancies, the minimum payment for [the] CNMI is estimated to increase to $46 [million] for FY 2019,” the report said, adding that the minimum payments are estimated to stay at that level through fiscal 2032.
Minimum payments after fiscal 2032 are estimated to be $46.25 million for three years.
At that point, Milliman said, the Fund balance is projected to be nearly exhausted and the CNMI payments will equal the benefits and expenses paid by the Settlement Fund.
NMI Settlement Fund trustee Joyce C. H. Tang discussed yesterday in federal court the status report for the combined second, third and fourth quarters of fiscal 2015. U.S. District Court for the NMI designated Judge Frances Tydingco-Gatewood presided over the hearing.
