Retirees to govt: Pay up now or court will compel you to pay

Worried about the future of their pensions, some 150 government retirees met as a group Monday night for the first time in years and demanded that the government start paying some $6 million every month in employer contribution to the Retirement Fund. They fear the Fund would go broke in just a few years if it doesn’t get the payments due it.

“The last resort for retirees is to ask the court to compel the government to pay. …The court told the government to pay land compensation and ordered DLNR to pay millions to [businessman Anthony Pellegrino]. Why can’t they pay us?” asked David Igitol, a retiree and charter member of the Commonwealth Association of Retired Persons.

Ron Barrineau, who helped organize the meeting, called on gubernatorial candidates to present retirees with a “workable plan that will put revenue into the retirement system so that these 3,000 retirees, most of whom do no have U.S. social security, will have some means of support.”

“We want the government to pay as much as they can of their share of the Fund which they haven’t done for many years, and we want anyone running for office to tell us what kind of plan he or she has to keep the Fund alive,” he added.

Retiree Agnes McPhetres said candidates should heed the call of retirees to win their votes.

NMI Retirement Fund administrator Mark Aguon, along with board trustees led by chair Juan T. Guerrero, presented during the meeting proposals to help save the pension system.

They include ceasing contribution refunds and disability benefits, halting benefits to those found guilty of felony and other crimes, soft freeze on benefits accrued at 20 years, as well as passage of a local bill that will shield the Fund from political tampering.

“It’s a renewed call for the government to pay. They have to pay $3 million per pay period or $6 million a month,” Igitol told Saipan Tribune during the Monday night meeting at the Pedro P. Tenorio Multi-Purpose Center in Susupe.

Press secretary Charles P. Reyes Jr. said the Fitial administration is willing to pay the employer contribution to the Retirement Fund mandated by the current budget law at a rate of 11 percent.

“It actually turns out to be a blessing that the government has not made the full employer contribution (according to the actuarial rate, at least) since September of last year because that would have only resulted in very substantial market losses and perhaps even a permanent loss of capital for the Fund and CNMI retirees,” Reyes said.

As of March 31, the CNMI government owes the Retirement Fund over $196 million in employer contributions, according to Fund comptroller David S. Demapan.

The NMI Retirement Fund’s unfunded liability has ballooned to $584 million, mainly because of the local government’s unpaid contributions to the pension system. That does not include the fiscal year 2009 interest penalty of $953,478.64 since it is not yet the end of the fiscal year.

This means for every dollar that the NMI Retirement Fund owes beneficiaries, only 34 cents is funded and 66 cents is unfunded, said Demapan.

Fiscal-year-to-date withdrawals from investments have already reached $4.431 million to pay for pension costs, refunds, conversion from the defined benefit plan to the defined contribution plan, staff payroll, and vendors.

Fund officials say if they keep using investments to pay for benefits while the government continues to fail to pay its obligation, these will result in the collapse of the CNMI pension system in just a few years.

Rep. Ray Yumul, chairman of the NMI Retirement Fund Working Group, said there’s still indecisiveness or reluctance to decide on a draft omnibus bill that aims to help stabilize the pension fund.

But he said this may be due to a need for more time to thoroughly review the bill.

Yumul, who also chairs the House Committee on Ways and Means, said among the draft bill’s provision is a reduction in certain Fund benefits.