CNMI RETIREMENT FUND SUES GOVERNOR

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SAIPAN, CNMI (Marianas Variety, August 3) – The Commonwealth of the Northern Mariana Islands Retirement Fund has sued Governor Benigno R Fitial and Finance Secretary Eloy Inos in their official capacities for the government’s failure to remit payments to the Fund amounting to $119.57 million.

The Fund, through attorney Joseph James Norita Camacho, filed the complaint in Superior Court late yesterday afternoon for damages, declaratory relief and for writ of mandamus.

The Fund wants an expedited trial.

The complaint cited 10 causes of actions, which included breach of contract.

The Fund is also asking the court to declare Public Law 15-15 unconstitutional "because it diminishes or impairs the accrued benefits of the Fund."

The law allows the central government to suspend the payment of employer contributions to the Retirement Fund for the remainder of fiscal year 2006 and fiscal year 2007.

The Fund said P.L. 15-15 also violates

• Article I, Section 1 of the CNMI Constitution which states that "No law shall be made that is a bill of attainder, an ex post facto law, a law impairing the obligation of contracts…."; and

• Article III, Section 20 of the CNMI Constitution, which states that "membership in an employee retirement system of the commonwealth shall constitute a contractual relationship. Accrued benefits of this system shall be neither diminished nor impaired."

The Fund asks the court to order the administration to remit all CNMI government employer contributions owed to the Fund, payments owed to the Fund, and remittances for other statutory obligations owed to the Fund amounting to almost $30 million.

The Fund, moreover, is seeking pre-judgment interest at the highest lawful rate, penalties at the highest lawful rate, attorney’s fees, cost of suit "and such other relief as the court shall deem proper."

The Fund said it was established to provide retirement security and other benefits to Mariana Islands government employees and to provide for an actuarially sound, locally funded pension system in accord with the constitutional provisions protecting the rights of government employees.

As of Aug. 1, 2006, the Fund’s complaint stated, the administration’s failure to remit contractual or statutory required payments to the Fund had increased the arrears owed by the Mariana Islands government to $119,570,785.82.

Fund officials said they had to sue the government or be accused of breaching their own fiduciary duties.

Press Secretary Charles P. Reyes Jr., in an earlier interview, described the Fund’s lawsuit as "counter-productive."

"Why didn’t they sue the previous administration? This has been going on for a long time. They had that fiduciary duty previously and all of a sudden they are becoming sensitive about it," he said.

[PIR editor’s note: The CNMI government’s debt to the Retirement Fund stems from a bill passed by lawmakers which enables the government to defer payments of its employer contributions to the Fund. The total accumulated debt was last reported at about US$123 million, over the past 10 years.]

August 3, 2006

Marianas Variety: www.mvariety.com

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