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New Fund contribution rate by Oct. 1
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Posted on May 13 2008
The NMI Retirement Fund has told the central government it will have to pay at the new contribution rate beginning Oct. 1, 2008.
Fund administrator Mark Aguon said in a letter to Finance Secretary Eloy S. Inos that the new pension contribution rate for the defined benefit plan—37.4 percent of the total payroll—will go into effect in fiscal year 2009.
The rate, as recommended by the Fund’s actuary, is an increase from the current rate of 36.7 percent.
“This increase is necessary to ensure that the Fund continues to meet its current as well as future obligations to more than 2,000 retirees. Kindly make necessary adjustments to apply this new rate effective FY2009,” Aguon said.
The pension program’s actuary, Buck Consultants, based the new rate on Retirement Fund data as of Oct. 1, 2006.
At that time, the Retirement Fund had accrued liability of $987.15 million, and assets of $472.7 million. This meant an unfunded liability of $514.46 million.
According to Buck Consultants, in order to achieve full funding of the defined benefit plan by the recently adjusted 2045 deadline, the government must pay $51.62 million a year to the Retirement Fund.
The central government has not made contributions to the Fund since early 2006. Recently, the Legislature passed a law allowing the government to pay at a rate of 11 percent.
