29 Apr 2008

CNMI govt must pay millions of dollars into retirement fund says consultant

10:13 am on 29 April 2008


An actuarial consultant says the Commonwealth of the Northern Marianas government must pay nearly 52 million US dollars a year to the Retirement Fund to ensure the defined benefit plan stays afloat.

The actuary-recommended employer contribution is 37 percent of the government's annual payroll, a slight increase of less than one percent from the current rate.

The annual contribution also represents nearly one third of the revenue the government expects to collect this fiscal year.

A consulting actuary at Buck Consultants, Dylan Porter, that by October 2006 the Retirement Fund had an accrued liability of 987 million US dollars.

But the Fund only has assets amounting to nearly 473 million US dollars.

This means results in an unfunded liability of 515 million dollars.

The government has not paid any contributions to the Fund since 2006.

The lack of money coming into the pension program is forcing administrators to liquidate assets to pay biweekly benefits.

If the drawdowns continue at the current rate, Fund assets will go under in less than 10 years.