admin's picture

SAIPAN, CNMI (Marianas Variety, Jan. 15) – Without even a single dollar transmitted to the Retirement Fund for the employer contribution of the Commonwealth of the Northern Mariana Islands (CNMI) government in the last 20 months, its outstanding debt to the agency is now over $166 million.

This was the revelation of Fund Chairman Juan T. Guerrero, who said the figure does not include the outstanding obligations from autonomous agencies such as the Commonwealth Ports Authority, the Public School System, Northern Marianas College, and the Department of Public Land.

"We haven’t seen one dollar from the central government from the last 20 months," he said.

The 15th Legislature passed a bill reducing the government’s employer contribution rate to 18 percent.

The Fund said the rate should be at least 36.77 percent.

Guerrero said the bill will have a great impact on the Fund’s "lifeline."

"The longer the government does not contribute, the higher the actuarial rate," he said. "In other words, it’s affecting the 20 years lifeline of the Fund. The calculations are based on the number of members retired now and the active members who will retire and their contributions."

An actuarial study commissioned by the Fund and released in 2006 recommended a 42 percent employer contribution rate but this was not implemented and the agency agreed to collect 36.77 percent.

Based on the same study, in 2021, no contribution will be required from the government as the invested fund is expected to reach $2.7 billion by that year.

"If the government will continue to pay the contribution regularly, the study revealed that by 2021, we don’t need the government’s contribution as we are fully funded. Invested fund is seen to rise to $2.7 billion," Guerrero said.

But because of the payment suspension, he said that the Fund need to "rebalance" its investments.

"We need to get the actuarial report back and do another asset liability study to determine the factors currently occurring before us," he said.

The Fund’s asset liability study was conducted in 2003

Rate this article: 
No votes yet

Add new comment