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Settlement Fund disputes resolution opposing trustee’s pay hike

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IN a letter to Rep. Joseph Leepan T. Guerrero on Thursday, NMI Settlement Fund Administrator Lillian Pangelinan disputed several items mentioned in  a resolution the lawmaker introduced earlier this week.

House Resolution 21-37 requests that the CNMI government oppose the District Court for the NMI’s order authorizing the increase of a Settlement Fund Trustee’s hourly rate to $350 from $250.

It also requests that the NMI Settlement Fund submit actuary and investment reports to the Legislature.

“The purpose of this letter is to address certain factual misrepresentations contained in H.R. 21-37, and to remind you that all Settlement Fund reports you are seeking (including, but not limited to, Actuary Reports, and Independent Audit Reports and financial statements) are available on the Settlement Fund’s website, which is updated regularly,”  Pangelinan said.

She then proceeded to respond to 19 factual misrepresentations in the resolution.

She said Guam attorney Joyce Tang —  the trustee whose fee increase is being opposed by the resolution —  was granted the hourly rate increase through a court ruling on Dec. 12, 2019.

The resolution states this date as June 11, 2019.

A portion of the resolution reads “Ms. Tang’s justification for her compensational increase is that it is solely based on the positive growth of the stock market. However, the growth of the stock market is not attributed to her legal services to the Settlement Fund.”

Pangelinan said this statement is false and misleading.

“Ms. Tang has never represented that the increased hourly rate was justified solely on ‘the positive growth of the stock,” nor has she ever taken ‘full credit' for the growth of stock.”

She noted that today, the Settlement Fund has over $135.35 million invested, which is more than what it had at its inception in 2013.

“Investment decisions are made by a team of professionals with a proven track record of making sound decisions. The Settlement Fund staff work tirelessly to ensure that the Settlement Fund’s accounts are properly maintained; that  retirees are given prompt service, and that retirees and the government are kept fully informed of the status of the Fund, the status of their benefits,” she added.

She said Tang and the Settlement Fund team have demonstrated single-minded determination in protecting the benefits of the retirees and the Settlement Fund by fighting to ensure that payments owed to the Settlement Fund are made and by protecting money in the Settlement Fund from being diverted for other purposes.

These combined efforts have ensured that retirees have been paid at least 75% of their benefits as required under the Settlement Agreement, and are important in expanding the life of the Settlement Fund, Pangelinan said.

Regarding the “additional cost to the Settlement Fund for travel, room, board, and transportation” for Tang as stated in the resolution, Pangelinan said this, too, is false and misleading.

“As of this date, her travel costs have been limited to airfare between Saipan and Guam,” she said.

She added that Tang does not charge for food expenses incurred on Saipan.

Moreover, she said, all of the trips in the past few years have been day trips and no hotel charges were incurred.

“All costs incurred by her firm are reasonable and the reimbursement of such costs are subject to the District Court’s review and approval,” Pangelinan said.

She said the resolution also claims that  the additional pay raise could have been used to aid individuals who are earning less than other recipients.

But Pangelinan said payments owed to Tang's law firm have no bearing on benefit payments made to the retirees. A statutory benefit formula is used to calculate benefit payments for retirees, she added.

This formula takes into consideration a retiree's average annual salary and years in government service.

She said as of Thursday, all retirees were receiving 100% of their full benefits, specifically the 75% owed under the Settlement Agreement and the 25% optional payment by the CNMI government.

The resolution calls for increasing the Settlement Fund obligation to 80%,  but Pangelinan said this will create instability and will not benefit the retirees.

“What it will do is lead to the Settlement Fund running out of money more quickly with the very real risk that the day will come when the government cannot pay the retirees what they are owed,” she said.

As for the resolution’s statement that retirees are not well-informed about matters concerning the settlement, Pangelinan reiterated that reports are accessible through the Settlement Fund website, which is actively maintained and updated.

She also pointed out that Tang is not a CNMI government official. “As the court-appointed Trustee, she reports exclusively to the District Court; her actions are overseen by Chief Judge Frances Tydingco-Gatewood; and all payments made to her law firm are scrutinized by the District Court. Because payments owed to Ms. Tang's firm are paid from funds belonging to the Settlement Fund, any payment made for her services do not impact the CNMI's budget. As you are fully aware, the payments owed to the law firm do not increase the CNMI government's payment obligations under the Settlement Agreement.”

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