Fund’s three local investments up for sale

Not one but all three local investments of the NMI Retirement Fund are now up for sale to interested parties, according to board chair Sixto K. Igisomar.

He disclosed to Saipan Tribune that aside from member home loan program, request for proposals for two other portfolios of the pension agency were approved to be issued out soon.

These include RFPs for the Commonwealth Government Credit Union portfolio and the receivables for the Judicial Building loan.

“The Fund is selling out its account receivables/portfolios in those three investments. The board also did approve the RFPs for them [credit union and judicial building loan],” he admitted to Saipan Tribune during a break in the board’s last meeting.

Igisomar said that the “sell-out” is part of the Fund’s streamlining measures since last year.

“The whole idea is to reduce our capacity so we can focus more on the member retirees [on Defined Benefit plan],” he said, optimistic that the agency will receive a pool of interested parties to acquire the said portfolios.

Saipan Tribune learned that RFP for member home loan program was issued on Feb. 8 and closed on March 12. As of last week, three requests were received by the board and which they discussed in a closed-door meeting last week.

The Fund has a total investment of $5.5 million in the member home loan program.

Documents obtained from the Fund show that the agency has 104 accounts under the member home loan which principal amounts to $5.2 million. Of these loans, 32 were determined delinquent which amounts to $2.015 million as of Jan. 31, 2012.

Records also show that the program has 14 “bad or doubtful” loans amounting to $953,644 while there are 18 accounts that are one year past due but considered recoverable loans. Board officials said they have tried several steps to save the program, but it seems the best way to do is outsource or sell the entire portfolio, probably to a bank.

For the judicial building loan, the Fund has recorded approximately $1.2 million in outstanding arrears from the government as of Nov. 30, 2011.

The Judiciary failed to satisfy the monthly remittance of $120,000 as required in the loan agreement. This loan is considered investment of the Fund because this account was recorded as loan receivable. It was the Judicial Building Financing Act of 1994 that allowed the CNMI government to secure a loan from the NMI Retirement Fund in order to build the Guma Hustisia, which has a maturity date of Aug. 14, 2015. The construction of the Judicial Complex began in 1995. It was completed in May 1998. The revenues generated by the Judiciary were the primary source of repayment of the loan.

For the credit union, it was disclosed that the Fund has still outstanding receivables from the original $2 million loaned out to the union in 1996. It was earlier admitted by the credit union and the Fund that due to drop in the union’s revenues, its monthly obligation of $10,000 to the loan has been affected. At present, more than half of the obligation has been fulfilled.

Igisomar told Saipan Tribune that besides these local investmens, other programs of the agency are being proposed to be transferred to other agencies such as the Workers Compensation Commission and the Group Health Life Insurance Program. Bills are pending at the Legislature proposing WCC to be included among the Department of Commerce’s duties while GHLIP to be transferred either under the office of management and budget or office of personnel and management.