Two-day forum seeks retirees’ views on proposed benefit cuts

Superior Court associate judge Kenneth L. Govendo has set a two-day forum on March 13 and 14 for all parties involved in the long standing lawsuit between the central government and the NMI Retirement Fund.

In a two-page invitation sent to the Fund board of trustees, Govendo indicated that he organized the forum after learning the frustration of the Fund to get members of the government and interested parties together to work toward finding solutions to the pension program’s crisis. Govendo said the forum is for parties to come together to “voice their concerns, ideas, and recommendations.” The forum is scheduled at 9am on both days at his courtroom, Room 205A.

Govendo cited the recent testimony of the Fund’s actuarial consultant, Dylan Porter, who said that the Fund will only last until July 2014 if the government employer contributions remain at just $13 million a year and pension payments remain the same.

Fund legal counsel Viola Alepuyo told the Fund board that Govendo aims to get specific answers and recommendations, specifically from retirees, on two questions: 1) Should the court be the one to make the cuts in members’ benefits? and 2) If the court should be the one to make the decision, how much is the cut to be made?

According to Alepuyo, Govendo called for the forum because he does not feel comfortable making the decision for the retirees.

Because the Fund board of trustees has no legal authority to cut members’ benefits, the board has asked the court to order some form of restructuring in pension payments until the Fund is sustainable enough to pay the full benefits.

According to Alepuyo, Govendo wants the presence of old and present members of the board of trustees, including Sixto K. Igisomar, whose term expired last Thursday. Igisomar said he will attend. Also invited are Gov. Benigno R. Fitial and Lt. Gov. Eloy S. Inos as well as CRA officials and members.

Igisomar emphasized at the Thursday board meeting that, although the Fund will not take a position on the proposal to cut members’ benefits, the agency’s consultant, Buck Consultant, presented various scenarios and options that may help the court and retirees determine the percentage of cuts that may be enforced.

Both Buck and the Fund’s investment consultant, Wilshire Associates, earlier disclosed that without new monies coming in to the portfolio and with the same amount of payouts and contributions, the Fund’s lifespan will last less than three years. Cutting benefits and increasing contributions were identified as key to prolonging the life of the pension plan.

Based on the unaudited records of the Fund, the agency received $13.1 million in employer contributions in fiscal year 2011 while $61 million was paid out as benefit payments.