Associate Judge Kenneth L. Govendo on Wednesday said the Fund “shall keep in reserve all sums held in members contribution (includes presently employed defined benefit members and retired members who have not received as much as they have contributed) pursuant to 1 CMC § 8381 (a), which sums up approximately $100 million at present.”
He said the $100 million in reserve should not be used to pay benefits to other members (other than each contributing member to his or her own employee contributions) and should not be spent for administrative expenses, consultant fees, money manager fees, and attorney’s fees “except as set for herein or otherwise permitted by subsequent order of the court.”
In last June’s review hearing, Govendo said the Fund should keep him apprised of all updates as to the amounts infused into the reserve.
The court had to make the order on suspicion that if it didn’t protect the current defined benefit plan members and new retirees, the Fund may not be able to do so.
He said the Fund has a fiduciary obligation to ensure that each individual member gets his or her money back in the event the pension agency collapses.
The court ordered the Department of Finance to pay the Fund all monies from the federal government for employer contributions of federally funded employees within three days of receipt.
Moreover, the Fund could request the court to issue a writ transferring to the pension agency ownership of the CNMI government’s Marianas House and vehicles in Washington, D.C. and any other government property to partially meet amount owed.
Veto
Fund Board Chairman Sixto Igisomar said on Thursday that the governor had assured him he would veto the bill on derivative lawsuit.
Senate Bill 17-43 was transmitted to the governor’s office on Aug. 16.
The Fund said the measure will further debilitate the agency with added costs.
In her report to the trustees, board counsel Viola Alepuyo relayed an investment consultant’s concerns.
“Wilshire advised the Fund that in the event the bill was passed into law, they will have to reconsider their relationship with the Retirement Fund,” she said, referring to Wilshire Associates, the Fund’s investment consultant.
Wilshire Associates expressed concerns about the “changing of the rules in the middle of the game” and described the bill as “anti-business.”
“This is the type of law that does not exist anywhere else in any other jurisdiction in the U.S.,” Alepuyo said.
She said the enactment of the bill could also impede the process of the Fund entering into contracts with money managers.
Gov. Benigno R. Fitial has until Sept. 24 to either sign or veto the measure.
In an earlier report, Fund legal counsel Carolyn Kern said the bill if passed into law will have a serious impact on cost of doing business for the Fund.
Wanted: tenants
During Thursday’s board meeting, the Fund said it was searching for new tenants to replace the Public School System which is vacating the second and third floors of the Retirement Fund Building on Capital Hill.
The trustees also decided to continue advertising the vacancy in local media and on the website, and disapproved a proposal to enter into a non-exclusive contract with a realtor to bring in tenants.
The two floors of the Retirement Fund are available for $1.33 per square foot.
Moreover, the Fund clarified that it did not “kick out” PSS.
Fund Administrator Richard Villagomez said PSS had earlier asked for a discount to which the board agreed. However, it eventually decided to vacate the building.
Interested office can contact the Fund at 322-3863.
