Marianas Variety

Tuesday, September 2, 2014-3:36:03A.M.

Last updateTue, 02 Sep 2014 12am

Headlines:


NMDC leader says they’re not against guest workers or anti-Kilili

NMDC leader says they’re not against guest workers or anti-Kilili

THE president of Northern Marianas Descent Corp, former...

PSS says travel expenses are federally funded

PSS says travel expenses are federally funded

CONTRARY to what some in the community may think, the t...

Cing: Some Tinian government workers need training

Cing: Some Tinian government workers need training

TINIAN mayoral candidate and former Sen. David M. Cing ...

CPA plans to purchase furniture for airport

CPA plans to purchase furniture for airport

THE Commonwealth Ports Authority is planning to add fur...

Other territories get more US funding than NMI

Other territories get more US funding than NMI

ALTHOUGH most programs and development projects on isla...

House urged to reject CUC deposit refund bill

House urged to reject CUC deposit refund bill

COMMONWEALTH Utilities Corp. Executive Director Alan W....

CNMI

Hopwood open house

Hopwood open house

(Press Release) — Hopwood Junior High School will hold an open house a...

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8 beginners complete first Open Water swim

8 beginners complete first Open Water swim

EIGHT of the swimmers in the Adult Learn-to-Swim Program successfully ...

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BC’s Tales of the Pacific: The largest tank battle in the Pacific

BC’s Tales of the Pacific: The largest tank battle in the Pacific

MOST of us don’t even notice the relics scattered around the island. T...

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No to political status commission bill

No to political status commission bill

CHAIRMAN Trenton Conner of the House Committee on Federal and Foreign ...

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After unrest over shooting, Ferguson police now wear body cameras

After unrest over shooting, Ferguson police now wear body cameras

FERGUSON (Reuters) — Police officers in Ferguson, Missouri, have begun...

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Variety Features

Celebrate Korean Thanksgiving with a feast at the Hyatt

Celebrate Korean Thanksgiving with a feast at the Hyatt

CHUSEOK or the Korean Thanksgiving will be celebrated with a dinner bu...

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Health in the CNMI: Tibetan medicine

Health in the CNMI: Tibetan medicine

THOSE of us who see doctors in the CNMI have grown accustomed to a few...

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A wonderful experience for the manamko’

A wonderful experience for the manamko’

OVER 40 senior citizens participated in a three-day retreat at Laolao ...

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Wibbly-Wobbly Timey Wimey Season

Wibbly-Wobbly Timey Wimey Season

Warning: This contains spoilers.

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Healthy meals at Everest Kitchen

Healthy meals at Everest Kitchen

THE sign said it was open but the parking lot was deserted, and it loo...

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Rota to kiss food crisis goodbye

Rota to kiss food crisis goodbye

THERE’S light at the end of the tunnel for Rota residents who will soo...

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The tourism industry’s ‘unsung heroes’

The tourism industry’s ‘unsung heroes’

ONCE tourists arrive at the airport, tour guides take them to the buse...

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Retirement Fund in disarray

THE recently signed derivative lawsuit measure has so far resulted in the termination of the contracts of the Retirement Fund’s two money managers even as the troubled pension agency braces for more canceled contracts.

The Fund’s newest member of the board, Frank P. Rosario,  tendered his resignation citing “health concerns.”

At least two of the Fund’s four legal counsels also indicated that they were ready to resign, but were asked by Fund Chairman Sixto K. Igisomar not to do so right away.

During a board meeting yesterday, Igisomar said they have been advised by their investment consultant Wilshire & Associates and other money managers that they will have to reconsider their relationship with the Fund because the new law exposes them to too many unforeseen liabilities.

He also said Fund Administrator Richard S. Villagomez was advised by money manager Stralem & Co. that it is giving a 30-day notice to terminate its contract with the pension agency.

Wilshire also informed the Fund of its intent to severe its relationship with the agency.

An email from money manager Richmond Capital expressed the same sentiment.

The Fund believes that Fisher Investments is also likely to end its contract.

Fund said its contract with another money manager, BlackRock, has a provision allowing for its termination should the derivative lawsuit bill becomes law.

Villagomez said  the Fund needs these money managers and consultant in order to comply with the  investment law.

“Our worst fear has come true,” he said.

“Whether it’s a valid law or not, we are feeling the effects already,” Villagomez said.

Public Law 6-17, the Fund’s enabling law, requires the board of trustees to obtain the expert services of money managers and investment consultant, he added.

“It is the fiduciary duty of the board and the Fund to get those experts,” he said.

With the derivative lawsuit bill now law, it will either drive up the costs of obtaining those services or prevent the Fund from obtaining them, he added.

Wilshire, for example, will need to procure a liability insurance should it decide to continue working with the Fund.

Wilshire gets $195,000 a year from the Fund and the liability insurance will cost $180,000, Villagomez said.

“We are left with responding and dealing with the effects of [Public Law] 17-51 and one of the scenarios is the rest of the money managers will quit. We would like to plan for that,” he said.

The money managed by  managers with terminated contracts now goes to a custodian, the Bank of Hawaii.

Trustee Adelina Roberto said $100 million in cash now sits in the bank.

Villagomez said it’s earning only 1 percent when it could have earned 4.4 or 4.3 percent in the market. This is $9 million in potential income lost, he added.

He said the bank custodian may also cancel its relationship with the Fund.

He told the board of Wilshire’s recommendation to consider mutual funds that will not be contractual in nature.

The board decided to authorize Villagomez to look into this option and make a presentation to the board.

The board also decided yesterday to authorize the publication of a job vacancy announcement for legal counsels as it foresees more lawsuits.

Board legal counsel Viola Alepuyo told the trustees they were supposed to tender their resignation yesterday but “held it off” upon Igisomar’s request.

The board then went into an executive session — a closed door meeting — to discuss details of possible courses of action.

The board will also talk with money managers and consultants on Saturday at 7 a.m. via teleconference.

Lawsuit

Also yesterday, the Commonwealth Retirement Association, as intervener,  informed the federal court of the “automatic removal” of the Fund’s lawsuit against the government from the CNMI Superior Court.

CRA, represented by board member Sapuro Rayphand, filed the written notice of removal in federal court.

Submitted as exhibits were two judgments issued by CNMI Superior Court Judge Kenneth L. Govendo regarding the  Fund’s lawsuit against the CNMI government, Gov. Benigno R. Fitial in his official capacity, the Department of Finance, and then-Finance secretary and now Lt.Gov. Eloy  S. Inos.

The notice stated that “a CNMI Superior Court judge has now, more than two years after rendering a $230 million judgment, and with little if any objectively meaningful steps toward enforcement of that judgment having been effected, deemed appropriate the notion of unilaterally converting a monetary collection proceeding before the Superior Court, into a hybrid class action, invoking priority with disparate benefits/interests for the class of which he and his peers would themselves appear to be members, and transposing himself from judge to Fund administrator or self-appointed receiver.”

Attorney Bruce Jorgensen will be representing CRA in this matter, and is expected to file a motion to consolidate this action and the lawsuit filed in federal court by two anonymous retirees against the Fund and Fitial to place the agency under federal receivership.

Then-CNMI Superior Court Associate Judge, and now Federal Chief Judge Ramona Villagomez Manglona earlier recused herself from hearing this matter in local court, and so it was transferred to Govendo.