Pensioners, retired government employees that contributed 6% of their salaries to the Civil Service Pension Plan (CSPP) as their retirement benefit, were called to a meeting this week by the Board of the CSPP to discuss the future of the Pension Plan.

On Wednesday night, several pensioners at the Ngarachamayong Cultural Center were upset that they were asked to solve a problem that was not of their making.

“It’s you and OEK and President’s job to find the money,” said pensioner Henaro Antonio.  “We have done our part contributing to the plan.  You have OEK pass a law giving you authority to go out there and look for funds,” he added.

CSPP Board member Seigfried Nakamura explained that their mandate as CSPP Board members is to invest the funds and that they can’t go outside of that mandate.

A financial report from the Pension Plan shows that it has about $26 million invested. Still, the Plan is drawing down an unsustainable amount every month to offset the shortfall in the benefit payments each month, and at the rate they are going now, with no new money coming in, the Plan will run out of money in 5 years.

Each year, according to the report, Pension Plan receives $7.053 million in contribution, but at the same time, it pays out $10.791 million in benefits.  The other sources of funding for the Plan still fall short, requiring the Plan to withdraw around $2.79 million from the investments, eating into the investment principal.

Pension Plan will have to increase the contribution level of those still working, reduce the benefit level to the pensioners, raise the retirement age, increase existing revenue and seek additional income to prevent the total collapse of the Plan.

Pensioners asked if CSPP had raised the issue with the congress and the President; both could change the laws or fund the shortfall. CSPP Board responded that they have brought the matter to the attention of the President and the lawmakers.

Last year letters from the Pension Plan Board were sent to the President and the OEK (congress) warning of the financial collapse of the Pension Plan.  The FY 2022 Unified Budget did not have a subsidy for the Pension Plan Fund.

Based on an actuarial study, Pension Plan Board issued a notice that it would raise employee contributions from 6% to 7% to prevent the insolvency of the Pension Fund. Still, OEK passed a Joint Resolution 11-16-3S, stopping CSPP from increasing the contributions.  OEK said they were informed that the Ministry of Finance is working with CSPP to “develop a comprehensive legislation that will substantially reform the Pension Plan and secure its financial longevity.”

A general consensus from the meeting was for the pensioners to sign a petition pushing the government to ensure that the Pension Fund does not collapse.

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