NMIRF assets up $62M in 8 months

The Northern Mariana Islands Retirement Fund registered a profit of $62 million during the first eight months of FY 1999 from its overseas investments, or a 22 percent increase compared to the same period of the previous fiscal year.

Considered the highest earnings in recent years, this brings to $344.5 million the total investment portfolio of NMIRF as of June 30, 1999, according to acting Director Fred Camacho.

For the month of June alone, NMIRF posted a $14.2 million in earnings.

In a move to expand its investment allocation strategy, the NMIRF board has approved the appointment of First Hawaiian Bank as its new fund manager to focus on large capital stocks. Such move brings to seven the total number of firms hired to oversee the Fund’s investments.

While the Fund’s investment in Asia has been experiencing wild swings since the financial crisis in the region begun in July 1997, it is still performing well compared to other markets, Camacho said.

With the recession in Asia, the Fund has no plans in investing more money there until the economic indicators show an upward trend, he added.

“We are still confident that we will recover. You cannot have 10 investments and expect to make money all the time. That’s why we have to invest in different forms of portfolio so that if you lose money in some, you make money in other areas,” said Camacho.

Although only 8 percent of the Fund’s money was invested in Asia, its earnings have shown a sharp decline of almost half of the gains made in 1997 due to the financial turmoil in the region.

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

In managing the contributions of the 5,000-strong government workforce for the last 20 years, NMIRF spends at least $3.2 million every month. Of this, some $2.7 million go to pensions of government employees while the rest are spent on salaries and administrative expenses.

The CNMI government owes the Retirement Fund some $21 million in unpaid contributions since January 1998. Camacho said he is expecting the payment of some $1.7 million anytime this week, the amount promised by the administration to help NMIRF meet its obligation to retirees.