THE government’s over $300 million unfunded liability to the Retirement Fund is accumulating interest but there is no assurance that it will be paid in the near future, according to the Fund’s administrator.
Karl T. Reyes said the unfunded liability is a serious monetary concern because of its possible adverse impact on the Fund’s resources.
The unfunded liability is the amount of contributions that the government should have paid the agency for the retirement benefits of an undetermined number of former government employees.
“That money has been owed to the Retirement Fund since the beginning. There are some government employees who never contributed anything but when they retired, they collected some money from the Fund based on their years of service,” Reyes said.
He said there are no indications that the cash-strapped government may be able to pay its debt.
“There’s no way they could immediately pay us that amount,” he said.
Reyes said the Fund is exploring other investment options to be able to come up with additional income to off-set the government’s inability to meet its financial responsibility to the agency.
On top of the unfunded liability, the government also owes the Retirement Fund $48 million in unpaid contributions from 1998 to 2000.
But this amount is slowly being settled by the CNMI government, which is making a bi-weekly payment of $500,000 or more, depending on its resources.
Kathleen Troy-Rucker, Retirement Fund legal counsel, said in a separate interview that the government has been paying on time since the settlement agreement was signed.
As of fiscal year 2001, the number of retirees receiving semi-monthly pension from the Fund reached 1,461. At least 52 were also getting disability benefits during this period.
Some 5,372 government employees currently employed by the government are making bi-weekly contributions to the agency.
Over 2,000 are no longer employed by the government but have contributions remaining in the Fund.
