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139 percent jump in last 3 months

By Moneth Deposa SAIPAN, CNMI (Marianas Variety, Aug. 3, 2010) – As of July 31, a total of 532 members have withdrawn their contributions from the NMI Retirement Fund-a 139-percent increase from April's 223 withdrawals.

With two more months before the end of the fiscal year, the Fund expects the number to go even higher, resulting in more payouts.

"Our records show that the NMIRF has paid $4.1 million in refunds in fiscal year 2010, accounting for 532 recipients," said Fund comptroller David Demapan.

From 2007 to July 2009, the Fund has had over 900

 refund applications, totaling $8 million in contribution payouts. If the current trend holds, the number of members withdrawing their contributions this fiscal year may reach the same level as the three-year refund record.

Fund officials had earlier projected only a little over 300 withdrawals this fiscal year.

Saipan Tribune learned that on a monthly basis, about $371,000 in refunds are being paid out, amounting to an average of about $12,000 per head.

Board of trustees chair Sixto Igisomar admitted yesterday that the withdrawal of members will help reduce the Fund's unfunded liability.

However, he could not say if this is good or bad for the Fund because there are some other factors to consider.

Igisomar believes that most of the withdrawals are due to the current economic hardship and cash-flow problems of members.

"Most of the time, they're withdrawing their contribution because of economic hardship and cash-flow issue. They see the pension withdrawal as a form of immediate cash," he said.

In July last year, the board of trustees approved a resolution stopping the issuance of refunds to members effective Sept. 1, 2009. But because of the impact of federalization in November last year, this policy was delayed for six months to February 2010. It was again postponed to July 2010 but the board recently decided to stop its implementation indefinitely.

The decision was made for the best interest of all parties and for the longevity of the Fund as well as consideration for the increasing number of unemployed government employees on the islands, Fund officials said.

The withdrawal of contributions was initially seen to benefit the Fund in the long run, based on the assessment of its actuarial consultant, Buck Consultants.

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