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Pacific Islands Development Program, East-West Center

With Support From Center for Pacific Islands Studies, University of Hawai‘i

Ad Litem NMI Fund Trustee Suspends Refund Payouts
Government reportedly failing to remit contributions

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, Nov. 14, 2012) – Hundreds of Northern Mariana Islands (NMI) Fund members who have applied for and are waiting for their refunds face an indefinite delay in their checks following the decision by Fund trustee ad litem Joseph Razzano to suspend the disbursement of checks until the federal court provides guidance on future releases.

Razzano said yesterday that the decision is due to the continued failure of the government and its agencies to remit the required payments to the agency, both employee and employer contributions.

For fiscal year 2012 alone, these agencies and the government have failed to fully pay both contributions for members of the defined benefit (DB) plan.

The recently enacted Public Law 17-82, which allows Fund members to withdraw their contributions, requires the Fund to refund not only the amounts the government remitted but also the amounts the government failed to remit.

According to Razzano, this creates a problem.

"The government's failure to pay the outstanding employee and employer contributions for members of the DB plan has created an inability to comply with the law," said Razzano.

He emphasized that the problem is not about "accounting" as the agency can account for all money actually paid by the government and its agencies to the Fund.

"To be clear, the Fund has and can account for the amounts actually submitted by the government and its agencies, but cannot pay to all members what is required under the law because the government, its agencies, and instrumentalities still possess a significant portion of those funds," he added.

Over 1,700 members have applied for refunds, of which only 94 have so far received their checks.

Razzano described the government's failure to fully remit what it owes the Fund as "tremendously unfair" to all members.

"In order to ensure fair and equal treatment of all DB members, the Fund will be seeking the court's guidance on this issue on an expedited basis. This action will protect the Fund and all of its members," said Razzano, adding that the Fund is striving to resolve the matter as quickly as possible.

Despite the suspension of check disbursements, Razzano assured that the Fund will continue to process all applications.

"The Fund will hold off on disbursing any more employee contributions under P.L. 17-82 until the federal court provides guidance on future disbursements. The Fund will continue to process applications so that as soon as the government, its agencies and instrumentalities remit payment or, the court determines that disbursements should continue even though the Fund cannot comply with the law as drafted, the disbursement of employee contributions under PL 17-82 can be made with as little delay as possible," he added.

The Fund earlier said that it has the capability to pay all refund payments as the court has already set aside $113 million for active members.

Saipan Tribune
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