Retirees troubled by Fund’s status

Retirees are feeling a sense of panic upon learning Tuesday that the CNMI’s pension program would only last three years if no drastic action is taken to save it.

Many of the 30 retirees who attended Tuesday night’s meeting at the Pedro P. Tenorio Multi-Purpose Center blamed the NMI Retirement Fund’s sagging fortunes on the government, the Legislature, and the Fund’s management for not giving the pension program the priority and attention it needs.

The more than two-hour presentation also took up specific laws and legislation that gave retirees and members “too generous and unrealistic” benefits, while the Fund management was also scored for excessive expenditures for operations.

Wilshire Associates principal Maggie Ralbovsky, who gave a presentation about the Fund’s status, said the program only has a lifespan of three years based on its current financial condition. Restructuring or cutting the pension benefits of members by 50 percent and increasing government remittances each year are immediate ways, for now, to extend that three-year lifespan, she said.

In order to keep the pension plan afloat for the next 10 years, the government would need to put in $58 million in employer contribution each year in the next 10 years, she added.

According to Ralbovsky, the NMI pension plan is far behind the status of other pension funds in other states and jurisdictions because of the lack of strong support from its sponsor—the government. Besides the over $231 million court judgment in June 2009, the government continues to be delinquent in its employer contributions for many months.

Due to its cash-flow problem, the Fund has been withdrawing some $70 million yearly from its investment portfolio for pension payouts and other obligation, causing its rapid depletion. As of last month, the Fund’s portfolio was valued at $305 million.

Fund legal counsel Viola Alepuyo pleaded with members and retirees to help save their program.

“I beg you, we need your help. Your voices are strong. Go up and convince the Legislature to help save the Fund. For many years, the Retirement Fund has been screaming for help…please scream with us,” Alepuyo told retirees after explaining how the Fund got into its current situation.

According to Alepuyo, retirees, particularly members of the Commonwealth Retirees Association, have been invited many times to meetings at the Legislature and the Office of the Governor but only a few showed serious involvement.

The Fund estimates that there are more than 3,000 retirees in the Commonwealth. However, only a few seem to be interested about the pension program.

After being presented with the facts and the gravity of the situation, many retirees expressed willingness to “sacrifice” and “act together” to ensure the perpetuity of the pension program.

They promised to pass on the information they obtained to fellow retirees and convince then to take part in the issue. Many admitted being unaware of the many bills and laws passed by the Legislature that contributed to the near collapse of the program.