Inos: Close off Fund’s DB plan, but no liquidation

Lt. Gov. Eloy S. Inos assured Tuesday that there will be no liquidation when the NMI Retirement Fund is transferred under the Department of Finance, sharing more specific details about the Fitial administration’s plan that includes “closing off” the Fund’s defined benefit plan to new members, concurrent with the Social Security buy-in, among other things.

“That’s just a function of transfer. So why would there be liquidation?” Inos told reporters after he swore into office six Division of Youth Services juvenile probation officers at Guma Hustisia in Susupe Tuesday morning.

Fund administrator Richard Villagomez earlier told the media that dissolving the Fund board and transferring the Fund’s functions to Finance means the pension program will be liquidated and benefits will end.

Inos said the administration’s plan is “still being fully developed,” and its details may still change as the development process continues.

This plan will be in the governor’s executive order that would place the Fund under a state of emergency.

“The bottom line is, if our plan succeeds, that is we close the DB plan, there will be no more new retirees. So what do we do? What does Retirement [Fund] do? We just cut checks every month, and what function is that? That’s a disbursement function. So what is liquidation?” Inos asked.

Inos said Finance will continue to have Fund investment assets managed by money managers, as is the current practice.

“Right now they [Fund] don’t manage the fund. They hire people, so why can’t the Finance Department hire the same people?” he added.

He said the Fund will become one of the divisions under Finance, to be headed by a director. Personnel details are still being worked out, including determining how many of the current Fund employees will be retained.

Inos, a former Finance secretary, said the administration hopes that the Fund will not continue to incur legal expenses, referring to a possible filing of an appeal of the federal court’s decision to dismiss the Fund’s Chapter 11 bankruptcy filing.

“One of our concerns here is that out of the current situation the Fund will continue to incur legal expenses to appeal, to file motions, stuff like that, and that is one of the driving forces for bringing it into the Executive Branch so we can control that part,” he said.

He said the government will continue to make sure the retirees receive their pension.

As for the expertise needed that the Fund administrator had mentioned such as those for document management, accounting systems, data processing and file maintenance, Inos said this: “Finance has been handling hundreds of millions of dollars a year for operations fund, capital development fund, so forth and so on.”

“If our plan succeeds, it’s only going to be two functions. One is the payment of the pensions. In fact most of them are paid through ACH [automated clearinghouse]. The other one is managing the investments and make sure that Treasury, every semi-monthly, we need to disburse $5 million, so withdraw the $5 million down and put it in the pension disbursement fund and [issue] checks. What else is there to do? We don’t need to review the eligibility of any more individuals because no more new retirees,” he said.