Bob O’ Connor, in an email to Variety, said Senate Bill 17-43 which the Senate passed unanimously “is a very modest bill which is aimed at protecting the rights of trust beneficiaries.”
The Retirement Fund, which opposes the measure, said it will result in a “barrage of lawsuits.”
Connor who testified in support of the bill during last week’s House session said it would provide enormous benefits to both the retirees and the Retirement Fund itself.
The retirees, he said, would retain their own legal counsel and all the money they recovered would go back to the Fund, minus the reasonable attorney fees.
Once S.B. 17-43 becomes law, Connor said the Fund would no longer need to engage any attorneys to handle the lawsuit, thus actually saving the Fund money. And if the suit is successful, he added, it will greatly benefit the Fund.
“The reason why actions can be brought by either the retirees or their ‘intended beneficiaries’ is obvious. An intended beneficiary, the retiree’s spouse or children are dependent on the retirement benefits and have a very important reason to want to protect those interests,” Connor said.
Introduced by Senate Floor Leader Pete P. Reyes, R-Saipan, and Sen. Jovita M. Taimanao, Ind.-Rota, S.B. 17-43 allows the beneficiaries of the trusts and retirement fund programs to maintain causes of action on behalf of their trusts and retirement funds when the trustees refuse to bring such actions.
The bill gives the Fund beneficiaries that same standing and rights to sue as shareholders of corporations.
In a separate interview, Commonwealth Retirement Association president Juan M. Sablan said the bill has no negative effect to the Fund. It is a fact, he added, that there’s no money to prolong the Fund’s program for retirees and active members.
“Let us sit down and help each other on how to support the Fund for the benefit of the retirees,” Sablan said as he recalled how the members of the Fund’s board of trustees refused to join the retirees in filing a lawsuit against Merrill Lynch.
Connor explained that some CNMI retirees sued Merrill Lynch for alleged improper fund management practices which may have cost the Retirement Fund tens of millions of dollars.
The Fund, he said, refused to sue to recover these monies, so several retirees sued instead. The Fund still refused to join the lawsuit to advocate for the retirees, he added.
The U.S. Securities and Exchange Commission, O’Conner noted, later charged Merrill Lynch with making misrepresentations to its pension fund clients and failing to disclose information.
The lawsuit filed by CNMI retirees against Merrill Lynch makes similar allegations.
The lawsuit, Connor said, would be more effective if the Fund joins it.
