I am not in a position to comment on the merits of this public law as I have not had the opportunity to review the engrossed/final form of the bill sent to the governor’s office for action.
All of the newspaper reports which have appeared after the enactment of this bill into law paint a bleak picture as one member of the board of trustees has resigned, two or more attorneys are threatening to resign and several financial advisers severing or giving notice that they intend to sever their relationships with the NMIRF.
It does appear that the situation is quite chaotic. This is quite understandable, given the fact that the board of trustees appears to believe that IT ALONE must select and retain these well paid consultants (and attorneys) to comply with its fiduciary duties and responsibilities to retirees and active members. That is not necessary the case!
I would like to propose a SIMPLE SOLUTION which would allow the NMIRF to comply with its fiduciary duties and responsibilities and result in substantial savings.
Under my proposal, the NMIRF would contact a reputable retirement system in the United States with an excellent track record in investing its assets (as well as those of other cities, counties and other political entities) and request that this retirement system invest/pool NMIRF’s assets for a reasonable fee. This process could be initiated under the guise of an emergency RFP. (It sure looks like an “emergency” from my vantage point in South Carolina.)
My guess is that this approach is fairly common in the United States as I don’t believe that small or medium sized cities and counties operate their own retirement systems as the CNMI does! The reason is simple…they cannot afford to do so.
A Google search will produce some interesting opportunities for the NMIRF.
I am confident that this approach would result in limited liability as the NMIRF’ Board of Trustees would no longer be responsible for selecting money managers , financial advisers and other consultants necessary to maintain its own portfolio. It also results in a significant reduction in the amounts the NMIRF now pays its existing money managers, financial advisers and other profession staff. (It is my understanding that the amount currently paid consultants and professional staff is over $2 million per year. Paying another retirement system a modest fee would greatly reduce these expenditures.)
Pooling our resources with those of a reputable retirement system makes a lot of sense to this retiree and should be pursued further by the NMIRF board of trustees.
As we face the demise of the NMIRF, it becomes vital that we utilize our limited resources wisely. This approach, if it had been adopted by the board of trustees in 2006 when they elected to sue the CNMI for failure to pay employer contributions, would have saved the NMIRF approximately $10 million.
DAVID L. PRICE
Retiree
