NMIRF to sell assets • Retirement Fund says move will ensure retirees are paid despite failure of gov’t. to remit money on time

Worried over its depleting cash resources, the Retirement Fund will sell portion of its multimillion-dollar investments to raise at least $5 million to ensure prompt payment of pension to more than 1,000 retirees on the island.

The move stemmed from the delay in payment of government contributions, which has drained the cash on hand of the NMI Retirement Fund.

Its Board of Trustees has tasked its financial consultant to plan the cash conversion of some stocks or bonds the agency holds in its portfolio to boost the coffers, said acting Administrator Fred Camacho.

Targeted for sell-off before the end of this month, this is the initial step laid out by the Retirement Fund in efforts to deal with the problems resulting from government’s failure to remit contributions on time.

“We want to have money on hand in case of emergencies just to make sure the retirees get their pension,” Camacho told in an interview Friday.

Members of the board met last Thursday evening to discuss the sale of its assets, the first time the Retirement Fund is taking out money from its investments. They are expected to decide on the plan within the next few weeks.

The financial consultant will first assess the portfolio to know exactly which stocks or bonds will be liquidated. “Getting the money is not difficult,” Camacho explained, “but as soon as we make determination as to how, when and where to get the money, then we will start the process.”

More than 70 percent of the total assets of NMIRF — from excess retirement contributions and pension pay of government employees — are invested by the agency into the stock market, while the rest are funneled into bonds, treasury bills and other securities.

Money managers hired by the agency handle its portfolio activities which are invested in three large stocks — Atlanta Sosnoff, Renaissance and Provident.

The total worth of the portfolio stood at more than $335 million as of March, up by nearly $10 million from the previous month. The increase has been attributed to the bullish stock market in the mainland, according to Camacho.

The Retirement Fund has relied largely from government contributions to raise more than $2.3 million each month to meet its obligations to some 1,200 retirees under pension — until lately when Gov. Pedro P. Tenorio’s administration has been behind in the payment due to the ongoing financial crisis.

Although the cash-strapped has settled already about $1.7 million out of the $21 million it has owed since January last year and has promised to make payment every month to reduce the debt, there is no assurance that the Fund will have enough cash to pay off pension in the next few months.

The decision to liquidate some assets is “just a guarantee to make sure that the retirees will be getting their pension,” Camacho said, “but that doesn’t mean that we don’t have the money or that they won’t be receiving their benefits at all.”