During Friday’s board meeting, legal counsel Carolyn Kern advised the board, “CPA and CUC are seeking to intervene.”
The Fund did not provide details, but Kern said CUC rejected the pension agency’s counter proposal.
The Fund sued CUC over $4.4 million in unpaid employer contributions, penalties and other damages.
CUC, the Fund reported last Friday, had made a offer of settlement of the lawsuit to which the Fund board made a counter offer but was rejected.
“We are pretty far apart,” said Kern referring to figures.
According to records, the Fund is owed by CUC in the amount of $4.44 million, $3.17 million of which were in employer contributions as of April 29, 2011 and $740,462 in penalties.
The Fund was also demanding $527,716 in economic damages.
As of Friday, CUC had not made another counter offer to the Fund’s offer.
Also on Friday, the Fund, through its counsel, expressed its resolve to pursue collection.
Kern said, “Either through the case being consolidated with that case or the case proceeding on its own, we are going to continue to collect what’s due from CUC.”
She reported that CUC is currently paying the employer contributions.
“They have been doing that for a year,” she said.
Other details of the case were discussed in executive session.
In a separate interview Friday, Fund board chairman Sixto K. Igisomar said he welcomed the agencies joining the lawsuit.
“This is a lot better for the Fund because we don’t need to fight separate cases. If you have a case and you think it is related, come in. We’ll settle it right there [in court],” he said.
As for the payment of the employer contributions based on the actuarially defined rate, Igisomar said, “You have to follow the actuarial rate.”
With the passage of several laws, Igisomar said payment of employer contributions based on the actuarially defined rate never changed.
“As the fiduciaries, we always go back to our foundation,” he said.
According to P.L. 6-17, the Fund’s enabling act, the Fund receives employer contributions with the actuary to determine the funding level required to retire the Unfunded Actuarial Accrued Liability that must be funded by adjusting the employer contribution rate.
The board of trustees adopts the recommended rate for the CNMI government.
As of Oct. 1, a new employer contribution rate of 60.8686 percent took effect based on the actuarial study and the Fund’s existing funding level.
As the agencies go to court, Igisomar said, “Have the court decide whether the trustees are wrong. Let the judge make the decision.”
Igisomar said the trustees are just following what the law says.
On the negotiation with CUC, Igisomar said the negotiation “pretty much failed.”
He said, “They are asking us to do something that is outside our parameter — to follow the numbers they are using.”
