NMI Settlement Fund Trustee Joyce CH Tang said they did not receive the alternative payment of a greater amount from the CNMI government for fiscal years 2018 to 2020.
Tang wrote Senate President Edith Deleon Guerrero a letter on Tuesday in response to a statement the Senate president made at the Saipan Chamber of Commerce general membership meeting earlier this month.
Deleon Guerrero stated that “there’s an overpayment of about $25.6 million from fiscal year 2018 to fiscal year 2020 that the CNMI government paid to the Settlement Fund, according to their alternative payment of a greater amount” or APGA.
This is patently false, Tang said.
“The Settlement Fund did not receive APGA for the period covering FY 2018 – FY 2020. This is because the Government’s total revenue reported in its audited financials for these years did not meet the threshold to trigger APGA,” Tang said.
She told Deleon Guerrero it would be helpful to understand how APGA is calculated, adding that “the math will confirm that APGA was not due for these periods.”
Tang said the settlement agreement requires the CNMI government to make an additional payment to the Settlement Fund if a threshold annual revenue is met. This threshold is determined by calculating the difference of 17% of the government’s total annual revenue and the minimum annual payment or MAP.
Tang said if the 17% total annual revenue for any fiscal year is greater than the MAP for that fiscal year, the difference would be the APGA due. Inversely, she said, if the 17% total annual revenue is less than the MAP for the same fiscal year, then APGA would not be due for that fiscal year.
Tang provided the Senate president with a table that summarizes the amount of the MAP compared to the 17% total annual revenue for the respective years. The table shows that in 2018, the minimum annual payment of the CNMI government was $45 million while the 17% total annual revenue was $43.1 million. In 2019, MAP was $44 million versus $33 million in 17% total annual revenue, and in 2020, MAP was $42 million versus $29.1 million in 17% total annual revenue.
“As you can see,” Tang said, “the MAP was greater than the 17% total annual revenue for FY 2018 to FY2020, therefore, APGA was not due.”
Tang strongly encouraged the Senate president “to contact us with any questions you may have in advance of making statements regarding the Settlement Fund.”
Tang said she and Settlement Fund Administrator Lilian Pangelinan are available to respond to questions regarding the Settlement Fund.
The Fund was created by the federal court as part of a settlement agreement with the CNMI government, which was sued by a retiree for its failure to make required payments to the NMI Retirement Fund.
Under the settlement agreement, the CNMI government must pay the retirees 75% of their benefits.
According to an actuarial valuation prepared in 2022 by the Settlement Fund’s consultant, Milliman Inc., the CNMI government must pay $34 million in fiscal year 2024, $33 million in FY 2025 and $32 million in FY 2026.
These figures do not include the retirees’ 25% benefit, which amounts to about $13 million annually.
