Camacho, R-Saipan, said the Retirement Fund is facing imminent danger.
“[The Fund officials said] lucky if we will have a retirement system in three years,” he said.
Fund officials are scheduled to meet with lawmakers to explain the agency’s current financial situation.
The Fund has been withdrawing from its investment portfolio since 2005 to cover its pension shortfall due to the central government’s failure to timely remit contributions.
Over $30 million was withdrawn last year.
The Fund releases about $5 million in pension checks every month for over 2,700 retirees.
The checks are supposed to be funded by the regular monthly collections from the central government and the autonomous agencies.
For fiscal years 2006 and 2007, the CNMI government enacted a law legalizing the suspension of payments to the local pension system.
The suspension was lifted in FY 2008 but the government is still delinquent with its payments.
According to Buck Consultants, the actuarial firm that conducted a financial study on the Retirement Fund, the CNMI owes $845 million to vested employees and an additional $103 million to nonvested ones, bringing to close to $1 billion its potential liability to more than 4,000 individuals.
But as of 2006, the Fund’s assets were just $473 million.
Moreover, this amount has been fluctuating since last year due to the volatility in the international markets.
The worst came this year with authorities estimating that the Fund’s assets have already fallen within the $300 million mark.
The Fund’s withdrawals in FY 2008 were estimated to have reached $45 million.
