An open letter to the Fund’s Board of Trustees

To: Board of Trustees – Messrs. Mark Aguon; Oscar Camacho; Pete Dela Cruz; Juan T. Guerrero; Mmes. Bertha C. Leon Guerrero; Esteven M.King; Rose L. Igitol; Rita Sablan

Those of us who are within the group of “the unheard common herd”—the High Popalorum and the Low Popahirum (to quote a Louisiana Governor, the late Huey Long)—know very well why the central government is in the financial condition it now faces and we know that the politicians brought it upon the voters (and retirees) as a result of ridiculously wasteful expenditures such as the purchase of the San Roque Shopping Mall; exorbitant salaries; mismanagement of CUC and any number of other abuses described at length in the public auditor’s reports. All this waste and inaptness in spite of millions of dollars available from the federal government, which served to relieve the central government of having to use the islands’ own internally generated revenue for infrastructure improvement, education, etc.

And now the government, in an attempt to recover from such waste, has the audacity to renege on its obligation to members of the Fund by exacting what amounts to undeserved punitive financial penalties leveled upon retirees by actions that are destined to ultimately bankrupt the Fund—while it should be the other way around—with the government being liable for the past, present and future damage and monetary loss to the Fund which its members have already, and will in the future, continue to sustain.

All members of the Fund should be concerned about actions by certain members of the Legislature and the central government concerning the grave neglect of contractual obligations and fiduciary responsibility owed the members of the Retirement Fund.

I recall a piece I wrote five years ago which appeared on July 10 and 11, 2001 entitled: “The Retirement Fund’s Creeping Meltdown.” This two-part article will be re-run in this paper over the next two days. Meanwhile, I continue to be dismayed that the economic situation concerning the financial well-being of the Fund (which is well known to the Trustees and need not be recounted here) has remained unresolved for such a long period of time and, indeed, the paralysis of inaction has actually resulted in seriously exacerbating the situation which becomes cumulative and thus much worse every month that passes, to the extreme detriment of the future financial security of the Fund’s membership and their families.

I know that every member of the Board of Trustees is aware of this problem as well as the possibility of the eventual collapse of the Fund as the financial “meltdown” is being compounded daily.

My questions and request to the Fund’s management are three in number as follows:

1. As a member of the board of trustees, do you not now think the time is long overdue in leveling with the members by issuing a “white paper” clearly explaining the dire consequences of the gradual diminishment of the Fund and the reasons for such an erosion of the member’s investment portfolio being the resulting repercussions of both past and present government policy?

Certainly such a “considered evaluated assessment” based on the best available information and logically presented must necessarily go beyond that of merely quoting the results of a recent audit which, by its very nature, is structured to be largely focused on past historical experience and records rather than anticipating the future repercussions of current government policy.

2. As a member of the board of trustees, do you not now believe that a clear explanation is owed the members consisting of an honest appraisal in the form of a statement based on your best fiduciary judgment as to the future and very real unavoidable consequences of the continued dissipation of member assets if the situation that presently exists isn’t abated in some way and quickly?

3. If present conditions continue, at what point in the future could it be reasonably expected that the Fund will be without the money to meet pension payment?

I certainly believe the board of trustees in fulfilling its duty has an obligation to all members and has the trusted responsibility to provide their best estimate to the above questions and this obligation must therefore rightfully trump any political concern or allegiance to anyone other that the members themselves.

I respectfully request that the trustees place this concern on the agenda at an early date for consideration and action in issuing a “white paper” as described above and addressing each of the three issues presented. Thank you.