Pensions short by $1.4M

Due to government offices’ failure to remit their contributions this month, the retirees’ pension checks are in danger of not being released as scheduled on Dec. 30.

NMI Fund board chair Joseph Reyes said yesterday that the pension fund is currently $1.4 million short for the Dec. 30 payment.

“There’s a big threat on the forthcoming pay period for retirees pension because we have not received the money,” said Reyes.

He said that, during a board meeting Thursday night, members “took the position that we need the money in order for us to issue the paychecks.”

Reyes called on the retirees to help the Fund lobby the government offices, particularly the Legislature and the Governor’s Office, to release needed funds.

“I’m asking and urging all retirees to help us collect from the government. I need the assistance of the retirees and their dependents to call their respective members of the Legislature and the Governor’s Office. We are having difficult financial times but this [pension] is something that’s earned. Plus, it’s the holiday season. The last thing the board of trustees want to do is not to pay them [retirees],” said Reyes.

He said that, even if the Department of Finance pays $850,000 next week, the amount would not satisfy the shortfall.

Finance Secretary Fermin M. Atalig said in an interview Thursday that his office would pay the government’s employers contribution amounting to $850,000 next week.

In the last two weeks, Finance paid a total of $600,000 to the Fund but these payments are still short of the government’s obligations.

Fund administrator Karl T. Reyes earlier said that the government is five pay periods behind in its employer contributions, totaling $4.2 million. Yesterday, the board chairman said the government is now five or six pay periods behind.

Finance pays the Fund $850,000 per pay period.

To date, the central government has $85 million in arrears in employer’s contribution. This reflects the central government’s unpaid employer contribution from December 2001 to the present.

The Fund said that payments made by the government are credited to the oldest accounts covering fiscal years 1998 to 2001.

Finance authorities said that payments to the Fund were current until June 1998. The Fund said that the government ceased payments from August 1999 until September 2001.

The Fund said that total employer contributions paid from October 2001 to September 2005 amounted to $56.3 million.

The Fund administrator said this week that not a single government office, including autonomous agencies, has paid its contribution to the Fund for December.

The Fund uses the contribution money to pay for its pension obligation to retirees.

The administrator said the Fund needs $2.2 million to pay the retirees’ pension checks next week.

The government is required to shoulder 24 percent of the retirement contributions of about 5,000 employees. Effective October this year, the rate was increased to 36.7 percent in view of the government’s huge debt.

Only two government agencies have been able to comply with the new policy as others cite lack of funding.

But even these two agencies, Northern Marianas College and Commonwealth Utilities Corp, have not paid their contribution for this month, said Reyes last week.