‘Use stabilization money to pay Retirement Fund’

Senate President Pete Reyes yesterday said he wants to look into channeling some of the federal stimulus money into the Retirement Fund.

Reyes said during a special Senate session yesterday that he would like to discuss with Gov. Benigno Fitial the possibility of using $8 million in State Fiscal Stabilization money to help with the growing problems plaguing the Retirement Fund.

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

The CNMI is expected to receive $43 million under the stabilization portion of the American Recovery and Reinvestment Act.

Of that, 81.2 percent must go to education while the remaining 18.2 percent can go to public safety and other government services, including assistance for elementary and secondary education and public institutions of higher education. It can also be used for modernization, renovation, or repair of public school buildings and higher education facilities.

Fitial said he would use the 18.2 percent, estimated to be about $8 million, to cover the payroll costs for government employees for the rest of the fiscal year.

Reyes said he realizes appropriating the $8 million to the Retirement Fund might not be a cure-all.

However, it would “definitely alleviate the situation,” he added.

Charles Reyes, press secretary for the Governor’s Office, said he was not sure if using the $8 million for the retirement contributions would be allowable under the law.

“We would have to look into it, but I believe the governor’s primary intention is to use the funds to save jobs or create jobs,” he said.

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.

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

They include stopping 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.