Hofschneider is Fund’s board consultant

Heinz Hofschneider, a former political rival of Gov. Benigno R. Fitial, will soon sit as a consultant of the NMI Retirement Fund board of trustees, reportedly to help the agency “recover and find solutions” to the current fiscal condition of the islands’ pension program.

Saipan Tribune sources said yesterday that the terms and conditions of the consultancy agreement have already been initially agreed upon by both parties.

It was only last Friday that the board of trustees first openly discussed the hiring of a board consultant at a cost of $70,000 per annum.

Board chair Sixto K. Igisomar confirmed with Saipan Tribune yesterday the “hiring” of Hofschneider for the position but declined to elaborate pending the signing of the formal agreement. He expressed belief, though, that Hofschneider will be an asset to the Fund.

Although a final contract has yet to be signed, Igisomar said that Hofschneider will mostly likely accept it. He expects the agreement to be signed within the week.

“Yes, I am negotiating a contract with Mr. Hofschneider and we’re currently ironing out some details of his contract,” he said. These details pertain to the “deliverables” expected of Hofschneider.

Hofschneider will be hired through a sole-source contract.

The Fund is authorized to enter into sole-source contracts within the next three months in the wake of the enactment of the bill that repealed the controversial Beneficiaries Derivative Act. One of the new law’s provisions suspends procurement regulations for 90 days.

Hofschneider was a gubernatorial candidate in 2001, 2005, and 2009. His best gubernatorial election result came in 2009, when he was the Republican standard bearer. He won the initial popular vote but failed to gain a majority, triggering a runoff against the incumbent, Fitial, who then won the runoff by 370 votes and was re-elected. Hofschneider is also former speaker of the House of Representatives.

Fitial, who was the standard-bearer of the NMI Covenant Party, returned to the Republican Party last year and is currently its president.

Recently, the governor appointed Hofschneider’s former runningmate, Arnold Palacios, as secretary of the Department of Lands and Natural Resources. He is currently the director of the Fish and Wildlife Division, a post that he also got from Fitial.

Igisomar told Saipan Tribune that with the current situation of the pension program, the board has to seek the best ways on how it can improve its situation. Based on the projection of the Fund’s former actuarial consultant, the pension plan is expected to be depleted in three years if no new money comes in.

From over $500 million, the Fund’s investment portfolio went down to only $256.7 million in December 2011, mainly due to the continued withdrawals being made by the Fund to pay for the pensions of retirees. The government also continues to fail to remit its employer share.