Fund cuts its workforce by half; now employs just 27

Contrary to what some retirees believe, the NMI Retirement Fund operates with a limited workforce, according to Fund administrator Richard Villagomez and legal counsel Viola Alepuyo.

In a recent meeting with a group of about 30 retirees, Alepuyo disclosed that the Fund has over 50 employees in 2007, when it had over $500 million in its investment portfolio.

That number has been cut by almost half, with the Fund now only employing about 27 personnel that cost the Fund about $1.2 million a year, inclusive of benefits, health, and life insurance.

For the Fund’s eight money managers, Villagomez said the service fees amount to about $2 million, and includes the professional fee for its actuarial consultant, Buck Consultants.

Villagomez described the current number of employees as “just enough” for the Fund to perform its most important function, which is to ensure that pension checks are issued regularly to members.

“The Fund has been streamlining for many years. At one point, we had over 50 onboard and that went down to 27 at present. Yes, we can still cut our expenses to zero, but you won’t have anyone to do the work [for you],” Villagomez told retirees.

Alepuyo said that the Fund’s board of trustees and its employees are not wasting retirees’ money—as many want to believe.

“Please don’t think that the Fund is sitting idle. We’re not overpaid. It’s not true. These are people who work for your pension to be out and who come in Saturday and Sunday but who don’t ask for anything other than their 40 hours,” said Alepuyo, emphasizing that savings from operation is not the solution to “save” the pension program.

Alepuyo disclosed that a crisis management plan, which identifies ways on how the agency could generate some saving, will be up for board action. Among these proposals are to shut down offices on Rota and Tinian and the privatization and outsourcing of the Fund’s other services.

Alepuyo also pointed out that the Fund has streamlined the employees at the Workers Compensation Commission from 10 to just two personnel at present. Because of the privatization of the Group Health and Life Insurance program, the Fund also eliminated a number of positions.

According to Fund officials, the only way to prolong the lifespan of the pension program is to put in more money in the investment fund and reduce the drawdowns for its pension payouts, which amounts to $70 million a year.

Wilshire Associates, the Fund’s investment consultant, disclosed this week that the CNMI’s pension program has a lifespan of only three years based on its current portfolio of $305 million.