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‘No retreat on planned lawsuit against NMI govt’
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Posted on Dec 28 2005
The NMI Retirement Fund of Trustees has reaffirmed its position to sue the government for its longstanding debt in employer contributions.
During a meeting Tuesday evening, the board expressed its determination to push through with the lawsuit. Its only concern is the “cost,” said board chair Joseph Reyes.
“But we’re not withdrawing. There’s no such thing,” he said.
He said the Fund’s legal counsel is now studying the issue to determine, among others, who to name as defendants.
“We are suing everybody that’s supposed to pay us the money—the central government and whoever is supposed to be sued,” said Reyes.
The central government owes the Fund $85 million in employer contributions or over $100 million including other obligations.
For this year alone, the central government has been four pay periods behind or $3.3 million in arrears.
The lack of payment also explains the shortage of funds to pay off pension obligations this Friday. As of early this week, the Fund said the shortage was at $1.4 million.
The central government was expected to remit to the Fund up to $800,000 yesterday, which would be credited to the ACH account or bank accounts.
The Fund said it needs a total of $2.3 million for pension payments this week.
Meanwhile, the $85 million arrears reflect the central government’s unpaid employer contributions from December 2001 up to the present.
The Fund said that, although the administration paid its contributions, these were credited to the oldest accounts covering fiscal years 1998 to 2001.
The Fund said that the government ceased payments altogether 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 government is required to shoulder 24 percent of retirement contributions for about 5,000 employees.
The 24 percent rate was raised by the Fund to 36.7 percent effective October this year in view of the government’s huge debt.
The Fund has a total of $526 million in unfunded liability.
