19 Jun 2006

Northern Marianas government says it had no choice but to stop payments to Retirement Fund

8:10 pm on 19 June 2006

The Northern Marianas administration says its bailout bills targeting the Retirement Fund are the only way to reduce its budget deficit.

The Fund is now considering legal action against the government after several bills became law on Friday.

The bills include the suspension of the government's employer contribution to the Fund for the next 18 months, extending the Funds deadline for self sufficiency from 2020 to 2045 and the creation of a defined contribution plan.

The governor's assistant for management and budget Antonio Muna says it had no other choice.

"These were basically the only available options and we have been discussing this with the Retirement Fund and the Legislature for some time and we really are now in the 11th hour, and we've really had to force the issue."

Mr Muna says a bill due to be tabled in July is asking the Fund to lend US$40 million to the Commonwealth Utilities Corporation.