Fund board of trustees legal counsel Viola Alepuyo acted as the chairwoman of the pension agency’s negotiating team in the absence of acting Chairman Pedro Dela Cruz who was off-island. Fund Administrator Mark Aguon was also on the team.
Commonwealth Utilities Corp. Executive Director Tony Muna, a U.S. certified public accountant, leads the administration’s team with acting Finance Secretary Robert Schrack and special legal assistant to the lt. governor Teresa Kim-Tenorio, as members.
Senate President Pete P. Reyes, R-Saipan, and Speaker Arnold I. Palacios, R-Saipan, lead the legislative panel.
The meeting yesterday began two hours behind schedule as lawmakers had to wait for the delayed arrival of the returning local troops at the airport.
Palacios said their goal is to come up with amicable agreements on how to pay the Fund without sacrificing vital public services.
Alepuyo said the Fund will ask the court to adjust the $231 million to reflect unpaid contributions from April onwards.
“These numbers will change,” she told the panel members. “The Retirement Fund’s position is, at the minimum, to try to have a zero-dollar drawdown from the investments.”
She said the Fund typically withdraws up to $50 million a year to cover the pension checks of retirees on a timely basis due to the cash-strapped CNMI government’s failure to remit its contributions.
The Fund said at the very least, the court’s order that it be paid 16 percent instead of just 11 percent in employer contribution rate should be adhered to starting this fiscal year 2009, which ends on Sept. 30.
Schrack said this will mean additional expenses of $450,000 on the government’s part because payment to the Fund was budgeted for only 11 percent.
According to an actuarial study, the Fund should be paid 37.39 percent.
Schrack said because the $450,000 was not budgeted this year, government agencies will have to further tighten their belts.
He said the money will be remitted to the Fund next week.
The Fund expects the 16 percent to go up by 5 percent every year, adding that the government should also remit tax collections from the hotel occupancy and alcohol container as mandated by the court ruling.
Sen. Maria T. Pangelinan, D-Saipan, questioned the court’s decision to set the contribution rate to 16 percent.
Assistant Attorney General Anthony Welch, who is on the administration’s team, said he himself doesn’t understand why the court chose 16 percent.
“I don’t understand the wisdom behind this myself,” he said.
Kim-Tenorio noted that legislative action is needed to meet the payment terms.
“This can’t be a negotiation strictly between the administration and the Retirement Fund. We recognize that we need the Legislature too,” she said.
Muna said the administration wants a “wholistic approach” in dealing with the local pension agency’s financial problems.
“The issue of payment is something that we recognize. We want to stop the erosion of funds,” he said.
