DESIGNATED Federal Judge Frances Tydingco-Gatewood said she is pleased with the status of the Settlement Fund.
In an order on Dec. 21, 2021, she expressed her gratitude to Gov. Ralph DLG Torres, the CNMI Legislature and Secretary of Finance David DLG Atalig for their good governance and continued cooperation with the court-appointed trustee, Joyce CH Tang, and Lillian Pangelinan, the Settlement Fund’s administrator.
According to the judge, the CNMI government’s timely payments to the Settlement Fund attest to its commitment to the retirees, despite the many financial hardships the government has had to face because of typhoons, the pandemic and the casino’s closure.
She noted that in addition to the 75% payments guaranteed under the Settlement Agreement, the retirees continue to receive the 25% benefit payments from the CNMI government.
The judge said the court appreciates the hard work of these leaders in serving the needs of the retirees while balancing competing interests of the entire community.
She also commended the trustee and her staff for their hard work and diligence in ensuring that the class members receive the benefits due them.
“The trustee has managed to keep operational expenditures low, while retaining key knowledgeable employees with experience in the Settlement Fund’s operations,” the judge said.
In the same order, Judge Tydingco-Gatewood also approved the trustee’s proposed budget for FY 2022 amounting to $43,067,507.
As for pending administrative appeals, the judge appointed Daniel P. Collins, United States bankruptcy judge for the District of Arizona, to assist in mediating the administrative cases.
The court will schedule the next status hearing tentatively for May 2022, Judge Tydingco-Gatewood said.
On Dec. 16, 2021, the Settlement Fund trustee, Civille & Tang, PLLC, acting by and through its principal representative Joyce C.H. Tang, presented an overview of the Settlement Fund’s status.
Tang told the court that the CNMI government continued to pay the minimum annual payments set forth in the settlement agreement.
For FY 2019, she said the government paid $44 million; in FY 2020 the government paid $42 million; and in FY 2021, it paid it paid another $40 million.
For the current FY 2022, the MAP is $38 million, of which the government has paid $4.4 million to date.
According to the trustee, the Settlement Fund has not had to liquidate any of its investments to cover operational costs and benefit payments since December 2018 because the CNMI government diligently made payments each week toward the MAP.
She said the CNMI government also enacted Public Law 20-33 to establish a Settlement Fund Revolving Fund Account that uses gross revenue taxes to pay the MAP.
She further reported that the Settlement Fund’s investment portfolio has had a strong performance and achieved a return of 8.8% for this fiscal year.
All of these factors have extended the Settlement Fund’s investment horizon.
Tang said while it is not required under the settlement agreement, the CNMI government continues to voluntarily make the 25% benefit payments to the retirees.
In 2009, retiree Betty Johnson sued the CNMI government for its failure to pay the amount that it was required by law to pay to the NMI Retirement Fund since 2005.
Johnson said the Fund would run out of money by June 2014 and would no longer be able to pay retirement benefits.
In September 2013, the parties agreed to settle the lawsuit and the federal court approved a $779 million consent judgment in case the CNMI government did not meet its obligations to the Settlement Fund.
The Settlement Fund was created by the federal court as part of the settlement between the CNMI government and retirees.
The federal court appointed Tang as Settlement Fund trustee on Sept. 25, 2013.
Frances Tydingco-Gatewood
