Thoughts on retirement programs

A new book has just been released describing how organizations spoil the retirement plans of their employees. The title is Retirement Heist by Ellen E. Schultz, Penguin Publishing. For those with English as a second language, the dictionary defines the word “heist” as robbery, holdup or steal; in other words, to take unlawfully. The author is a former staff investigative reporter for the Wall Street Journal and points out several methods employers use to cut costs by cutting into the retirement plans they sponsored often as part of a compensation package to induce workers to join the organization. 

One example described by the book’s author was labeled the “pleading strategy” where the organization tells its retirees that the burden of their medical expenses are too high and ask retirees to accept reductions in their benefits. This is sometimes referred to as the “creeping take away” which involves slowing taking away benefits little by little, with the “chipping away” process so slight that the reductions are intentionally designed to appear to be insufficient to warrant retirees incurring the legal cost and headache to fight the slow diminishment.

According to the author, in one instance when the issue did get to court, attorneys for the organization desiring to limit benefits previously contracted for saw their attorneys playing with the plain English language of the contractual agreement with retirees. They did this by attempting to interpret words and define phrases to suit their deadbeat clients. For example, arguing the term “lifetime” didn’t mean extending over the remaining life span of the retiree but instead meant to cover the life of the contract. It became a game of semantics in an effort to renege on a contractual agreement with the retirees.  

Still another method according to the author was to establish an “offshore” organization outside the laws of the United States—make a different organization responsible for a retirement program and let it go bankrupt or simply unilaterally “terminate” the benefits with not so much as a “sorry about that,” then wait for the retirees to sue, and when they do, drag out the litigation until the retirees either give up or die. Check out the book on Amazon.

For more than 10 years I have been interested in the NMI’s retirement program and over that period the following articles have appeared in this paper any one of which can be reviewed in the archives when requested by date (month day and year). For those interested the titles and dates are listed below.

The articles were independently researched and written without remuneration, hopefully to be of interest to NMI retirees . I felt the subjects listed and the issues discussed were in need of exposure from the point of view of an economist and retiree. It was hoped the material would be informative and helpful to interested retirees and others. Dating from the year 2001 the articles were published for the purpose of alerting retirees and various administration officials of the deteriorating condition of the Retirement Fund. These alerts appeared in the early years in the absence of any newsletter, periodical, or website published by either the Retirement Fund or the central government. The author believed that members of the Fund at large and others (surviving spouses and dependent children) would find those subjects addressed and listed to be in their financial interest.

* The Retirement Fund’s “Creeping Meltdown” Neglect of the Fund: Money Must Make Money, Part 1, Variety, July 10, 2001
* The Retirement Fund & Government’s Costly Neglect: Money Must Make Money, Part 2, Variety, July 11, 2001
* A Retirement System In Trouble, Variety, Nov. 4, 2002
* It’s Only Money—and Size Has Nothing To Do With It, Variety, May 13, 2003
* The Retirees’ Troubled Health Insurance Program: Is A Financial & Political Solution Possible?, Variety, June 10, 2003 (With graph: Government Income & Expenditures [1986 to 2001 Locally Generated Revenue])
* The Retirement Fund and the golden goose that is about to be cooked, Variety, Jan. 29, 2004
* Write It On The Wall, Tribune, April 14, 2004
* Plucking the Retirement Goose, Tribune, Dec. 29, 2004
* Will it be Back to Square One With the Government’s Medical & Health Privatization Recommendations?, Tribune, Jan. 7, 2005
* Kåo para ta fanhanåo tatte gi tinituhon-ña i Siguridåt Hinemlo’ na progråman gubietnamento?, Tribune, Jan. 12, 2005 (Jan. 7 article above translated by Henry I. Sablan)
* How Long Are You Likely To Live After Retirement? And Will The Fund Still Be Operational?, Tribune, Jan. 14, 2005
* Some Unanticipated Consequences Resulting from the Government’s Neglect in Making Payments to the Retirement Fund: Part 1, Tribune, Jan. 27, 2005
* Some Unanticipated Consequences Resulting from the Government’s Neglect in Making Payments to the Retirement Fund: What Options Remain?: Part 2, Tribune, Jan. 28, 2005
* The Responsibility of Managing Other People’s Money, Tribune, Feb. 1, 2005
* A Few Thoughts on the Privatization of Retirement Programs & Medical Plans: Part 1, Tribune, Feb. 17, 2005
* A Few Thoughts on the Privatization of Retirement Programs & Medical Plans: Part 2, Tribune, Feb. 18, 2005
* A Little Bit About A Lot of Money: The CNMI’s Retirement Fund, Tribune, Feb. 22, 2005
Graph #1 – Estimated Retirement Fund Losses of $121.6 Million
Graph #2 – Hypothetical Example of Reduction in Purchasing Power
* Who Wins, Who Loses? A Look At issues Facing Retirees, Part 1, Tribune, April 6, 2005
* Who Wins, Who Loses? A Look At issues Facing Retirees, Part 2 , Tribune, April 7, 2005
* Making Money By Spending Less, Tribune, April 22, 2005
* Beating Retirement’s Dead Horse, Tribune, July 29, 2005
* Sooner Or Later: More Retirees Than Government Employees, Tribune, October 2005
* Retirement Fund: A Way Out for a Big Loser, Tribune, Dec. 18, 2005
* Pension Plans and Investment Sophistication: Retirement Risks, Regrets & Rewards—A Personal Observation, Tribune, May 19, 2006
* Why Doesn’t The Retirement Fund Declare Bankruptcy And Be Done With It?, Tribune, May 23, 2006
Graph: U.S. Provided Covenant & Special Program Funds (1978 to 2002: $ 522.8 Million)
Graph: CNMI Govt. Internally Generated Revenues (1986 to 2001: $2.5 Billion)
* The Corrosive Power of Inflation: Will Inflation Affect the Purchasing Power of Your Pension Regardless of The Retirement Plan You Have? No Doubt About It, Tribune, June 13, 2006
Graph 1: Approx. Average Life Span For Males In The CNMI Calculated From The Year 2006
Graph 2: Approx. Average Life Span For Females In The CNMI Calculated From The Year 2006
* Defined Benefit or Defined Contribution? The Impact on Retirees, Present & Future, Tribune, July 21, 2006
* Defined Contribution or Defined Benefit Plan: Know Your Enemy, Tribune, July 7, 2006
* Plans, Power & Politics: What Does The Future Hold For Current & Future Retirees? Part 1, Tribune, Aug. 10, 2006
* Plans, Power & Politics: What Does The Future Hold For Current & Future Retirees? Part 2, Tribune, Aug. 10, 2006
* Millions in Interest Earnings Lost to Current & Future Fund Members, Tribune, Aug. 14, 2006
* Malpractice Insurance & Millions Lost to the Retirement Fund, Tribune, Aug. 30, 2006
* Letter to the Editor: Requesting Fund’s Board of Trustees to issue a ‘White Paper’, Tribune, Nov. 7, 2006
* Planning For Retirement: Thoughts on Defined Contribution Plans And A Few of the Many Issues to Consider, Part 1, Tribune, Dec. 14, 2006
* Planning For Retirement: Thoughts on Defined Contribution Plans And A Few of the Many Issues to Consider, Part 2, Tribune, Dec. 15, 2006
* Are Some Retirees Not Accepting Reality?, Tribune, Dec. 19, 2006
* A Lot of Money and a Large Government Payroll, Tribune, Jan. 19, 2007
* CNMI Govt. Shortchanging Retirees & Current Employees Big time (While operating for the benefit of the few at the expense of many), Tribune, Feb. 14, 2007
* Retirement Fund: For Too Long Too Little Paid by Govt., Part 1, Tribune, Feb. 28, 2007
* Retirement Fund: For Too Long Too Little Paid by Govt., Part 2, Tribune, March 1, 2007
* Thoughts on a Sinking Economy & the Eventual Collapse of the Retirement Fund: Ten Years Is A Short Time, Tribune, May 24, 2007
* The Government’s “Shell Game” With the Retirement Fund, Tribune, June 29, 2007
* Tough, Resilient Survivors (But For How Long? Two Tragedies In The Making), Tribune, July 2, 2007
* Letter to the Editor: A Call For Support, Tribune, July 2, 2007
* Is The Pot Calling the Kettle Black? A Note From The Hill, Tribune, July 27 , 2007
* The Retirement Fund Goes To Court, Tribune, Sept. 11, 2007
* End of Your Retirement Pension & the Fund’s Defined Benefit Plan: It Could Be Sooner Than You Think, Tribune, April 23 &24, 2008
* The Government & Legislature’s Continued Long-Term Neglect Resulting In Millions In Financial Losses To The Fund, Tribune, April 25, 2008
* Government’s Failure to Meet Its Financial Obligation to the Fund Costly to Both Taxpayers and Retirees, Tribune, May 1, 2008…
Death By A Thousand Cuts: The Bleeding Retirement Fund, Tribune, May 5, 2008
* W.Va. Teachers Hope to Return to Defined Benefit Retirement Plan: Could this be a harbinger for the NMI at some future point?, Tribune, May 12, 2008
* Letter to the Editor: Retirees As Owners of CUC ? Could Be!, Tribune, Aug. 22, 2008
* Will The Retirees’ Financial Resources Wind Up A CUC “Money Pot”? Let’s Hope Not, Part 1, Tribune, Aug. 25, 2008
* Will The Retirees’ Financial Resources Wind Up A CUC “Money Pot”? Let’s Hope Not, Part 2, Tribune, Aug. 26, 2008
* Why Are Non-Members Permitted To Exercise Great Influence Over Retirees’ Financial Security?, Tribune, Aug. 29, 2008
* The Fiduciary Responsibilities of Fund Trustees Regarding the Issue of Investing In CUC, Tribune, Sept. 9, 2008
* Where Do We Go From Here? Is The Retirement Fund In Jeopardy Resulting From An Economic Meltdown Of Its Own, Tribune, Oct. 7, 2008
* Confidence: It’s All In The Mind—And Always Has Been, Tribune, Oct. 14, 2008
* What’s The Possibility of Bond Financing For The Retirement Fund?, Tribune, Oct. 24, 2008
* No Social Security “Safety Net” for Many Govt. Retirees As The Legislature Opted Out of the US System In Favor of NMI’s Retirement Fund (Two Parts), Tribune, Oct.27 & Oct. 28 2008
* The Leaning Tower of Pisa Provides A Lesson for NMI Retirees, Tribune, Nov. 28, 2008
* A Thousand Days Left for the Fund?, Tribune, Dec. 11, 2008
* Open Letter to Pete P. Reyes, President of the Senate Concerning the Retirement Fund, Tribune, Dec. 24, 2008
* “Selected” Problems & Events Impacting All NMI Retirees, 2 parts, Tribune, Jan. 28, 2009
* What Happens to the Retiree’s Group Life & Medical Insurance Program If The Fund Goes Broke?, Tribune Feb. 5, 2009
* Bond Financing for Fund: Bad Idea, Tribune, March 6, 2009
* An Open Letter to all Retirees, Tribune, March 27, 2009
* Letter to the Editor: Rebuttal to Attack on Fund Trustees, Tribune, 3 parts, April 20, 2009
* The Responsibility of Managing Other People’s Money, 2 parts, Tribune, June 9, 2009
* Could Government Bankruptcy Ever Be An Option for the Fund? Tribune, June 16, 2009
* It Should be Against the Law for the Legislature to Break the Law! Tribune, July 7, 2009
* Words of Advice to Fund Members a la Yogi Berra: It Ain’t Over ‘Til It’s Over,” Tribune, July 14, 2009
* Retirees, If You Ever Needed Proof, Here It Is, Tribune, July 17, 2009
* Letter to the Editor: To Interested Retirees &
Other DBP Fund Members, Tribune, July 24, 2009
* Waiting On The Tooth Fairy: The Retirement Fund’s Deadbeat Creditor, Tribune, Aug. 13, 2009
* Will Fund Members Get The Short End of the Stick? Lost Opportunities and Lost Property, Tribune, Aug. 20, 2009
* A Few Thoughts on Evaluating Pension Obligation Bonds, 2 Parts, Tribune, March 18 & 19, 2010
* In The NMI: Whose Court System Is It Anyway?, Tribune, April 14, 2010
* The Retirement Fund: What A Difference Nine Years Made—Or Did It? Another Look at Pension Obligation Bond, Tribune, April 16, 2010
* Part #1: Why A Pension Obligation Bond Guaranteed By The Fund May Not Be In The Best Interest of Retirees—A few questions and issues awaiting a just and fair solution, Tribune, April 26, 2010
* Conclusion: Why The NMI Government Should Be The Entity To Guarantee Any Required Pension Bond And Not The Retirees or Their Fund—A few questions and issues awaiting a just and fair solution, Tribune, April 27, 2010
* No Social Security “Safety Net” for Many Govt. Retirees As The Legislature Opted Out of the US System In Favor of NMI’s Retirement Fund, Tribune, May 3, 2010
* The Government’s “Shell Game” With the Retirement Fund, Tribune, May 4, 2010
* Thoughts About Pension Obligation Bonds and Questions Which May Not Have Been Asked, two parts, Tribune, Aug. 9 & 10, 2010
* Dedicating the Use of Bond Proceeds and Sticking To It, Tribune, Sept. 3, 2010
* Dodging the Pension Obligation Bond Bullet, Tribune, Nov. 15, 2010
* A Tale of the Future In 3 to 4 Years or Sometime Around 2015 If Not Before, Tribune, Sept. 21, 2011
* Can NMI Judges Support Retirees Any Further? A Question for Consideration, Tribune, Oct. 4, 2011
* What & Who Wrecked the Fund—The Failure of NMI Government to Pay its Debt Ruined the Retirement Fund: An Economist’s Opinion, Tribune, Oct. 24, 2011
* Message for retirees: What Happens to the Retiree’s Group Health and Life Insurance Plan When The Fund Goes Broke?, Tribune, Dec. 6, 2011
* A somber message to retirees: How long are you likely to live without a pension if the Fund goes broke in two years?, Tribune, Dec. 21, 2011