NMIRF demands payment of $40M from CNMI gov’t

The Northern Marianas Retirement Fund will launch an aggressive step to collect the Commonwealth government’s unpaid contributions that have ballooned to about $40 million.

Fund Board Chair Vicente Camacho said the government’s continued refusal to settle its financial obligation has, in fact, resulted to multi-million revenue losses in several potential investments abroad.

Mr. Camacho said this prompted NMIRF administration to demand immediate payment of the government’s unpaid obligations, in order to help the agency carry out its various programs and off-island investments.

In addition, payments to be made by the government will also be used to pay off hundreds of on- and off-island health providers to which the agency owes over $3 million.

Mr. Camacho said Fund officials are scheduled to meet with Gov. Pedro P. Tenorio and Budget officer Ed Tenorio, including respective legal counsels to map out an effective payment scheme.

He said NMIRF will demand the immediate payment of these unpaid government contributions not only to prevent disintegration of Fund’s financial stability but to re-invest the money to several potential investments abroad.

“We will ask for a meeting with the budget officer, the legal counsel, and the governor, to discuss this problem. We have not made any collection from the government in terms of retirement benefits and we will be demanding payment,” said the board chair.

Due to the government’s inability to settle its financial obligation, its $30 million unpaid contributions in June 2000 has ballooned to close to $40 million to date.

Had the Fund placed this money to investment markets, Mr. Camacho estimated that NMIRF could have reached the billion-dollar mark, by generating higher yields for the agency’s off-island portfolio.

“We are losing potential investments and we could use that to pay off other financial obligations,” said the board chair.

Last year, Mr. Tenorio told NMIRF that the administration will seek funding sources to pay its obligation to the agency. The governor said he will find ways to allocate money to settle the government’s unpaid contributions.

The Tenorio administration is behind in remitting its share to the NMIRF due to the financial difficulties confronting the CNMI for the past several years.

But like the CNMI government, NMIRF is also experiencing similar financial problems and the continued failure of the government to settle its obligation is posing greater danger to the Fund’s financial integrity.

The Fund needs $3.2 million every month to manage the contributions of 5,000-strong government workforce. Of this, $2.7 million goes to pensions of government employees while the rest are spent on salaries and administrative expenses. (EGA)