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Reyes dispels fears about Fund ‘myths’
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Posted on May 25 2006
The Fitial administration yesterday tried to clarify “myths” about its proposal to have the NMI Retirement Fund forgive the government’s $125 million debt and lend $40 million to the Commonwealth Utilities Corp.
Press secretary Charles P. Reyes Jr., in an effort to dispel fear that the plan might lead to the Fund’s bankruptcy, said the proposal would actually be beneficial for both the retirement agency and the community.
He said that the 7.5-percent interest rate proposed by the Defined Benefit Plan Rescue and Reform Act of 2006 is a reasonable rate that many financial institutions are not offering.
“All we’re asking is for the Retirement Fund to shoulder the costs of revitalizing CUC and get a return on top of that. This will put CUC in a far better position to address the power problem substantially. This will also help the economy, which is dependent on CUC’s services,” Reyes said.
He also assured retirees and active members that the administration would repay the $40 million that CUC would be borrowing from the Fund.
“The CUC is under new management. The Fund will get its money back,” he maintained.
Furthermore, Reyes said the debt writeoff was simply an “accounting arrangement” that would put the government in a better position to pay employer contributions to the Fund later on.
