CNMI AGENCIES OWE RETIREMENT FUND $20 MILLION

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Total government arrears top $250 million

By Junhan B. Todeno

SAIPAN, CNMI (Mariana Variety, July 23, 2009) - Commonwealth of the Northern Mariana Islands (CNMI) Retirement Fund says different autonomous government agencies owe it more than US$20 million.

The fund reported that it failed to reach its desired projected revenue in June as the CNMI government and the autonomous agencies are in arrears in their employer contributions.

The Superior Court has ruled that the government owes the Fund more than US$231 million.

The autonomous agencies’ arrears were not accounted in the judgment.

According to David Demapan, the comptroller of the Fund, the current principal CNMI central government’s unpaid employer contributions have jumped to over US$159 million from over US$149 million in FY 2008 or an increase of US$9.8 million.

Autonomous agencies, on the other hand, owe the pension agency over US$20 million—up by 32 percent from US$15 million in FY 2008.

For the month ending June 30, 2009, the total revenues of the Fund reached US$19.4 million— 19 percent short compared to a year ago’s record of US$24 million.

Demapan made the report during the pension agency’s meeting yesterday.

Demapan said also noted that the Fund secured US$2 million in total revenues as far as its investment activities are concerned for the period.

He said the Fund saved about 9 percent in June because its expenses totaled only US$5.5 million versus its operating budget of US$6.1 million.

Demapan said the board authorized a US$45 million drawdown from the Fund’s investment this FY 2009. Last month, the Fund withdrew over US$4 million to finance its various obligations to retirees.

"Based on the trend analysis, we expect to save US$1.4 million from the draw down authorization of US$45 million at the end of the fiscal year," he said.

Demapan said the investment statement for the month ending June 30, 2009 were not available but the investment performance through May 31, 2009 showed the market value of the investment as over US$309 million.

"Through May 31, 2009, the investment performance reported a loss of US$41.9 million. Majority of the loss came from the realize loss of US$34 million and unrealized loss of US$13.9 million," Demapan said.

He also said the Retirement Fund continues to receive consistent monthly debt service payment from its four local investment interest which reached to US$1.9 million as of June 30, 2009, the financial report of NMI Retirement Fund showed.

Except for the Member Home Loan program, the Retirement Fund continues to get payments from its investment in Group Health Insurance Program, Commonwealth government Employees’ Credit Union and Judicial Building Loan.

The Fund secured US$706,318.17 collections from the member home loan borrowers, which US$344,210.74 of the total collections was applied to the principal, and US$362,107.43 was recognized as interest income.

Demapan reported US$135,000 collection from CGECU and US$1,064,205 from Judicial Building Loan receivable.

"Because our investment interest with the CGECU is at risk, I will continue to monitor the financial performance of CGECU and report to you on a quarterly basis," Demapan told the board presided by Juan Guerrero.

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