An open letter to all retirees

If you are a retiree or a current employee of the government and participating in the defined benefit retirement plan and haven’t given much thought to the future of your retirement, you had better do so and quick.

Considering the rapid diminishment of the U.S. economy and by extension the full range of investment instruments which might otherwise be available for the Fund’s portfolio, I have been giving some thought to the imminent default of pension payments in the next three or five years if the predictions of Fund officials are anywhere near being accurate. Indeed, the Fund may not have even three years.

The extreme volatility of the stock market makes it difficult to predict how the Fund’s investments will perform as booms and busts are inevitable. There is no guarantee the value of today’s investments as low as they currently are will remain at the same level tomorrow and thereafter. Indeed, it is almost certain they will not. There is always the possibility that the Fund’s remaining investments could be wiped out sooner than predicted.

Looking unemotionally at the very real possibility of the death of the Fund and considering the matter in a realistic manner while facing cold facts, I frankly don’t see where the central government will ever be able to pay its debt to the Fund or resume payments to avoid the Fund’s predicted and certain “crash.”

Face it. The central government simply can’t pay money it doesn’t have any more than you or I could.

As far as any court ever ruling to attach the government’s assets for assignment to the Fund as has been suggested (hoped) by some—and the subsequent liquidation to meet the central government’s financial obligation to the Fund in an attempt to preserve it—I don’t think that will ever occur.

Face reality.

Such assets belong to the people of the Commonwealth—all the people—and not just a couple thousand retirees. I find it hard to believe that a jury or a court would diminish the assets of all the people to make restitution for the loss of property rights for the retirees.

More likely, the government could simply issue a worthless promissory note to retirees—and that would be the end of it. You couldn’t buy a bag of betel nut with that useless paper. Think about it!

As for breaking a contract with retirees—that supposedly sacrosanct bedrock mechanism of conventional society—SO WHAT!

It wouldn’t be the first time the central government broke a contract and while it may suffer a temporary “black mark” by some investors and credit rating firms, it will soon pass and be forgotten as all other unpleasantries are.

Besides contracts are broken all the time and so what if the court awards a judgment against the government? You are simply right back to where it started—facing a cold hard fact that “the government can’t pay what it does not have and likely never will have.” A court judgment won’t make any difference.

“You can’t get blood out of a turnip or make a purse out of a sow’s ear” as my dear sweet granny was fond of saying.

The above is my sober assessment on the issue of the Fund’s future and in my judgment “rose colored glasses” and wishful thinking on the part of some retirees won’t change the outcome, as bitter as it may be to accept. Only a concerted, organized, dedicated effort on the part of all retirees can even begin to attempt to solve the problem of “their” fast approaching financial meltdown.

As I think about events that brought about the present situation resulting in the loss of confidence in the government’s ability to honor its contractual and legal financial obligation to the Fund, I recall that one of the definitions of treason is “the betrayal of a trust or confidence.” In my opinion what has happened to the members of the Retirement Fund by the central government if not corrected and soon amounts to nothing less than “economic treason.”

As I see it there are only three things the retirees can do to even attempt to avert the personal financial catastrophe facing many people and their families. Those are: First, demand that each candidate running for office—whether for governor or a seat in the Legislature—produce a written “white paper” of their respective detailed, specific plans to preserve the financial integrity of the Fund. And don’t accept the harebrained, ineffective, cockamamie, useless idea of floating a pension obligation bond. Believe me, that won’t work. (For information on that subject and why “that dog won’t fight” see: “Bond Financing” in the Saipan Tribune archives of Oct. 24, 2008 and March 6, 2009).

Second, call for each gubernatorial candid to participate in a public debate to offer their respective solutions to the financial crises facing the retirees.

Third, retirees and those members still working and not yet retired should organize and form an association to protect their financial future. This has even been suggested by the chairman of the Fund’s board of trustees.

If you are interested in becoming a member of the new retiree’s association currently being formed contact Roger Ludwick. E-mail contact is preferred at ludwick@itecnmi.com. Please indicate “Retiree’s Assoc.” in the subject bar. Otherwise telephone (670) 322-4950.