TASK FORCE TO SCRUTINIZE CNMI RETIREMENT FUND

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Special investigation to offer solutions within 90 days

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, April 6, 2012) – A special task force for the NMI Retirement Fund will soon be formed to immediately work on finding solutions to the present crisis buffeting the pension agency.

Oscar Camacho, director of the Commonwealth Retirees Association (CRA), told the Fund board Wednesday that the association has already received assurances from Gov. Benigno R. Fitial that he will sign the bill into law as soon as it is transmitted to his office.

Camacho said that CRA chair Larry Cabrera and Fitial met early this week and discussed possible remedies for the pension program's woes.

According to experts, the Fund is projected to collapse in less than three years without the infusion of new cash and with the same level of expenditures.

As of February this year, the Fund's investment portfolio-from which it draws pension funds-had an estimated value of $253 million, while its accrued unfunded liability is now over $900 million.

Camacho revealed that a bill proposing the creation of a task force for the Fund is being drafted and will soon be introduced at the House of Representatives. He said that CRA chair Cabrera is also working closely with House Speaker Eli Cabrera on the specifics of the bill pursuant to the recommendation of Associate Judge Kenneth Govendo.

Govendo earlier ruled that he cannot order a cut in the Fund members' benefits because he believes that the court is not in a position to be doing so, since that authority lies with the pension agency's board of trustees and the Legislature. Instead, the judge recommended several ways to save the pension program, one of which is the establishment of a special task force.

[PIR editor’s note: Should the yet-to-be-appointed task force not find an agreeable solution before the June 15 deadline set by the Superior Court, receivership may be implemented for the Fund. Current ideas involve the "floating of a pension bond and to tax the bond," which has been said would be "sort of a pension cut."]

Camacho said the task force will work within 90 days to come up with concrete plans on how to save the Fund.

At present, there is a special task force created by the Senate that is working on pending legislation that will impact the Retirement Fund. Prior to this, some committees have been also formed to help address the Fund's problems.

"I don't know if this new one [task force] would really help, but I have to have some faith that something has to work," said Camacho.

When asked by board on the focal point of the task force, he said the solution may be to float a bond for the Fund. "I don't think it will be on the reduction of member's benefits, but more on floating a bond that retirees will have to pay [through taxes on their income]," Camacho told the board.

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