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2 firms vie for DC program contract
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Posted on Dec 15 2006
Only two proposals will be up for review by the CNMI government for the third party administration of the defined contribution program, said the NMI Retirement Fund.
Fund administrator Mark A. Aguon said that after a preliminary review, it was known that a company submitted two proposals, while a fourth proposal was not considered at all.
“We could only process one proposal from a company,” said Aguon.
He earlier said that four proposals came in response to the Request for Proposal issued for the defined contribution plan.
“We have two [companies] right now,” said Aguon.
He declined to identify the two companies but said that both are from Guam.
In an earlier interview, Aguon said that two of the four proposals were submitted online, which was not the preferred method of the Fund.
The agency said that it required proposals to be mailed or hand-delivered on or before Nov. 30, 2006.
The Fund ended up giving a one-week extension deadline to receive postmarked documents.
Aguon said the two qualified proposals are now pending review.
The winning proposer has to be ready to accept enrollees for the new program effective Jan. 1, 2007.
Public Law 15-13, known as the Defined Contribution Plan Act of 2006, requires all new CNMI government employees hired on or after Jan. 1, 2007, to be enrolled in the defined contribution retirement plan.
There are less than 3,000 members of the existing defined benefit program who are eligible to transfer to the new plan. Eligible members are those who have less than 10 years with the defined benefit plan.
The government is currently implementing a defined benefit program, which entitles pension benefits to employees for life.
The defined contribution plan would be cheaper for the government as it only gives away what the members have contributed to the plan.
Under the defined contribution plan, the government pays at much reduced rate of 4 percent from the current 36 percent, while employees contribute at a higher rate of 10 percent from 6.5 percent.
