Fund Administrator Richard S. Villagomez asked House members to support House Bill 17-220 which will repeal Public Law 17-51.
Signed by Lt. Gov. Eloy S. Inos last week, P.L. 17-51 allows retirees to sue on behalf of the Retirement Fund if it refuses to do so.
Villagomez told reporters that the derivative law “has been very damaging to the Fund.” All their money managers, he said, have cancelled their contracts.
In his letter to Speaker Eli D. Cabrera, R-Saipan, Villagomez said the negative effects of P.L. 17-51 are now obvious. The service providers, he added, “are either terminating their contracts or unwilling to enter into contract with the Fund in light of the added liabilities and uncertainties brought on by P.L. 17-51.”
The consultants and money managers who have sent them termination notices are Buck Consultants, Wilshire Associates Inc., Stralem & Company Inc. and Black Rock Inc.
Villagomez said they have also been informed by Richmond Capital Asset Management and PIMCO of their intent to terminate their respective contracts.
“For the benefit of your Retirement Fund, retirees and members we beg you and all the honorable members of the House of Representatives to urgently pass H.B. 17-220,” Villagomez said.
Not all retirees like the idea of allowing them to sue, according to online commentator Ruth Tighe who was among those in the House gallery to express support for the repeal of the derivative law.
In an interview, Tighe said nothing actually prevents retirees from suing. She said she believes that retirees like her can still sue even without the derivative law.
“The right to sue existed even before the [derivative] law was enacted,” she said.
Tighe said the ramification of the enactment of the derivative law is severe. Now that the Fund’s money managers are resigning, nobody will protect the retirees’ money.
Also, she said, there are “atrocious” provisions in the new law. One, she said, is the 12-year statute of limitations which she describes as “unreasonable and absurd.”
