National gov’t owes pension plan $2.4M plus interest

Since January 1 of this year, the national government has failed to remit to the pension plan the amount of over $2.4 million. The unremitted amount plus its accrued interest of $288,231.41 has pushed the total government obligation to $2,695,886.17.

“As of the date of this writing the National Treasury owes to the pension plan contributions in the amount of over $2.4 million plus accrued interest of $288,231.41 for a total of government obligation of $2,695,886.17,” stated the letter by pension plan administrator Presley Etibek to Sen. Mark Rudimch and Del. Secilil Eldebechel, respective chairman of the ways and means and financial matters committees of both houses.

The lack of timely contributions by the national government forced us the plan to “plow deeper into the investment funds to cover monthly benefit payments and administrative expenses”. Etibek said this has proven detrimental to pension plan’s investment portfolios given the volatility of the market these days and the fact that the market value of investment funds have declined by more than $3 million since October 1, 2010.

The lack of and lateness on remitting employee and employer contributions have led the plan to withdraw funds from investment in excess of $4 million as of August of this year. “This is a financial disaster in the making that we urgently need to resolve immediately.” Said Mr. Etibek. The letter solicited support from the two committee chairmen leading the budget development in the OEK for appropriation in fiscal year 2012 National Unified Budget Act in the amount of $3,000,000.000 to help defray members’ and participants’ benefits.

Etibek explained that the last appropriation to the Plan was in fiscal year 2007 in the amount of $400,000.00 there seem to be general lack of efforts and sense of urgency to address the plan in an annual appropriation in the past national budget acts to keep it in sound actuarial basis.“Financial collapse if this Plan is ten times more catastrophic than that of the now defunct Pacific Savings Bank” added Etibek.

Tia Belau
Volume 20, Issue 38 – September 19, 2011, page 3

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