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Pacific Islands Development Program, East-West Center

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NMI Fund Sues College, School System And Hospital
Government agencies owe millions to retirement fund

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, Dec. 12, 2012) – The Northern Mariana Islands Retirement Fund yesterday filed in federal court an amended complaint against three government agencies for failing to remit employer contributions to the pension agency.

Named third party defendants in the amended lawsuit were the Northern Marianas College (NMC) and two of its officials, the Public School System (PSS) and six of its officials, and the Commonwealth Healthcare Corp. (CHCC) This case arises from the failure of these agencies to remit the mandated employer and employee contributions to the pension agency. It represents past due payments, including penalties that total tens of millions of dollars.

The agency officials included in the amended third party complaint are NMC president Sharon Hart, Ph.D., and Board of Regent member Frank Rabauliman; Education Commissioner Rita A. Sablan, Ed.D., and Board of Education members Galvin Deleon Guerrero, Tanya King, Marylou Ada, Lucy Blanco-Maratita, and Herman Guerrero.

The amended complaint, which was filed by Fund counsels Braddock Huesman and Daniel Berman, expands the relief being requested by the Fund to include a receivership and injunctive relief.

The Fund disclosed that, as of yesterday, the total amount of NMC's delinquency, including the deficit from partial contributions and the failure to make any contributions since April 10, 2012, total more than $6.29 million. For PSS, the delinquency is more than $30 million. It was revealed that since the inception of Commonwealth Healthcare Corp., it has made no payments to the pension agency and the arrears now total $7.4 million.

According to the Fund, the penalty that has accrued on these delinquent payments now amount to $1.62 million for NMC, $6.9 million for PSS, and $1.4 million for CHCC. Both the unpaid employer contributions and the statutory penalty continue to increase with each passing pay period.

The three agencies and their officials are accused of breach of contract, declaration judgment, and violation of the U.S. Constitution.

The Fund, in its 15-page filing yesterday, wants the court to enter judgment for the Fund and award damages in an amount to be determined.

It also requested the court to enter declaratory judgment in its favor, finding the defendants to be in breach of contract and in violation of the U.S. Constitution's prohibition against an impairment of contract obligations.

Also being sought is injunctive relief, payment of attorney's fees, costs of court, and other relief.

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