20 percent across-the-board cut on Fund budget eyed

The NMI Retirement Fund may be forced to reduce its personnel cost after the board of trustees received a recommendation to cut the agency’s operational budget due to limited resources.

The Fund’s finance and personnel committees have recommended a 20-percent cut on the pension agency’s personnel cost and all others to reflect its declining revenue.

Board chair Sixto Igisomar said Friday that although he is not against any budget reduction, he asked the committees to carefully look at all areas of operations to ensure that important services to the retirees will be maintained.

He said since he assumed the chairmanship, his leadership has initiated some internal austerity measures in an effort to save on the Fund’s operating budget.

Igisomar admitted that despite these efforts, “more pressures” have been received by the Fund to implement more cuts.

Desk audits conducted last year were also in relation to this budget planning.

Igisomar hinted that personnel may be primarily affected by the proposed 20-percent cut which will be finalized once a comprehensive analysis is done by the committees.

“I am not against any budget cuts. What I am saying is, make sure it is reviewed properly to really balance the service that is demanded by the retirees,” he said.

Igisomar said included in the agency’s personnel cost are the fees for the investment consultant, actuary consultant, money managers, and professional services. But because they left since the passage of beneficiaries derivative law in September, the committees are looking into this as among the areas that could be “saved” or streamlined for now.

Fund officials have earlier claimed that the agency is operating with a limited workforce contrary to what many retirees believe that it employs excessive count of personnel onboard.

In 2007, it was revealed that over 50 employees were working for the Fund when it registered over $500 million in investment portfolio. This figure was reduced significantly, with only 27 total employees as of July 2011.

Saipan Tribune learned that for these employees, the Fund paid $1.2 million in personnel cost which include benefits, health, and life insurances. For the money managers, service fees amount to about $2 million last fiscal year which include the professional fee for its consultant.

Last Friday, Fund administrator Richard Villagomez reported that they are still reviewing the agency’s crisis management plan which identifies ways on how the agency could generate some savings.

Saipan Tribune learned that among these are the proposal to shutdown offices on Rota and Tinian and the privatization and outsourcing of the Fund’s other services.