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Fund seeks reduction of benefit payments by 25 percent
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Posted on May 30 2012
The NMI Retirement Fund has sought the court’s authority to continue its payments to beneficiaries but with a cut in benefit payments by 25 percent.
The Fund, through counsel Braddock J. Huesman, asked the U.S. District Court for the NMI’s Bankruptcy Division for the continued payments to beneficiaries for eight pay periods, for a total of four months—June 30, July 15, July 31, Aug. 15, Aug. 31, Sept. 15, Sept. 30, and Oct. 15.
Beneficiaries who currently get more than $6,000 per year shall receive the greater of $6,000 (on an annualized basis) or 75 percent of their current benefit, said Huesman in the Fund’s proposal filed in court on Tuesday.
Beneficiaries who currently receive $6,000 or less per year shall continue to receive their full benefit payment, without cuts, he said.
“The interim proposal, in aggregate, will reduce each semi-monthly benefit payout by approximately $645,000 (from approximately $3,075,000 to approximately $2,430,000),” the lawyer said citing a declaration by Fund administrator Richard Villagomez.
Huesman said that based on the most current actuarial data available, this reduction alone will prolong the life of the Fund by about a year.
Huesman said the Fund believes that the period requested—four months of court-approved payments—is appropriate because it provides beneficiaries with the ability to plan for the potential need for a further reduction after at least two, and up to four, months of payments.
The period requested, he said, will allow the Fund to request a further reduction in benefits for the last two months of the four-month period.
This requested period, Huesman added, will allow the Creditors’ Committee, which has only recently formed, to provide greater input on any follow-on proposal necessary to provide a bridge until a plan or reorganization can be formulated and proposed for confirmation.
