Fund board OKs distribution of $120K as bonus

The NMI Retirement Fund’s board approved Friday the distribution of some $120,698 in annual retirement bonus to retirees and members, not as cost-of-living allowance as previously allowed under the law.

Board chair Sixto Igisomar told Saipan Tribune that the annual retirement bonus has no compounding effect, unlike COLA, which increases the base benefit checks of retirees.

Igisomar said the $120,698 will be taken from the appropriation made by the Legislature for fiscal year 2011.

According to the Fund’s legal counsel, Carolyn Kern, some payments have already been made for fiscal year 2011 and one more payment remains to be sent out.

Igisomar explained that based on a newly enacted law, the board now has the authority to decide whether it will provide COLA or bonus every year. This, he said, is contrary to the Fund’s original proposal to eliminate the two.

“That’s what we initially requested-to remove it. But they [lawmakers] came back to us telling us ‘it’s up to you’ to decide between COLA and bonus. Our intention is to repeal the law because the only time we can provide additional benefits is when we are comfortably funded. Otherwise, we’re not being fiscally responsible,” he added.

Igisomar pointed out that the only time the Fund can provide additional benefits is when the pension plan’s funding level is at 80 percent to 100 percent. The Fund’s $264 million portfolio represents about 40-percent funding level.

“Whatever you call it-COLA or bonus-we are trying to stay away from it because the only time we will be heading toward COLA or bonus is if we actually hit the 80- to 100-percent funding level and we’re not,” he told Saipan Tribune.

MPLT lease proposal

The board on Friday also approved the proposed lease agreement with the Marianas Public Land Trust, which wants to occupy a portion of the Retirement Fund building. Fund administrator Richard Villagomez reported that MPLT responded to the RFP issued by the agency after the relocation of Public School System in August.

It was reported that MPLT wants to lease a small area on the second floor and the agency has agreed to go up to $1 per square foot in rent. The amount is a slight increase over the Fund’s proposed 75 cents per square foot.

Board trustees instructed the management to make sure that MPLT will have a separate meter for its utilities and a security deposit.

Kern said that MPLT plans to move in by Dec. 1 and she has been authorized by the board to work out the details of the proposed lease agreement for the board’s final approval.