14974edcbf
* [examples/openspending] - openspending v0.2 * [examples/openspending][m] - fix build * [examples/openspending][xs] - fix build * [examples/openspending][xs] - add prebuild step * [examples/openspending][m] - fix requested by demenech * [examples/openspending][sm] - remove links + fix bug
29 lines
2.8 KiB
Markdown
29 lines
2.8 KiB
Markdown
---
|
|
redirect_from: /2013/11/northern-mariana-islands-retirement-fund-bankruptcy/
|
|
title: Northern Mariana Islands Retirement Fund Bankruptcy
|
|
authors:
|
|
- Rufus Pollock
|
|
---
|
|
<!-- magazine.image=http://community.openspending.org/files/2013/11/northern-mariana-island-retirement-declaration-pdf-1024x509.png -->
|
|
|
|
Back on April 17 2012 the Northern Mariana Islands Retirement Fund attempted to file for bankruptcy under Chapter 11. There was some pretty interesting reading in their [petition for bankruptcy][petition] including this section (para 10) which suggests some pretty bad public financial management (emphasis added):
|
|
|
|
[petition]: http://www.nmiretirement.com/downloads/Docket_Files/08_First_Day_Declaration.pdf
|
|
|
|
> "Debtor has had difficulty maintaining healthy funding levels due to a combination of factors, including: the **failure of the Commonwealth's central government and autonomous agencies to remit full employer contributions**; a difficult investing climate over the most recent three to four years; and **a benefit structure that has been continuously increased and made more generous by the Commonwealth government without a corresponding increase in funding to the Debtor to cover increased costs**."
|
|
|
|
<img src="http://community.openspending.org/files/2013/11/northern-mariana-island-retirement-declaration-pdf-1024x509.png" alt="northern-mariana-island-retirement-declaration-pdf" width="591" height="293" />
|
|
|
|
The Government then made things even worse:
|
|
|
|
> "These issues have combined to place the fund in a dire financial situation. Compounding this perfect storm, the **Commonwealth Government has passed laws declaring payment holidays, diverting earmarked revenues from the Debtor and reducing contribution rates for the Commonwealth Government, its agencies and political subdivisions**."
|
|
|
|
And they are now very bankrupt:
|
|
|
|
> "As a result, as of the date of Debtor's last actuarial report as of October 1, 2009, Debtor's actuary determined that Debtor's obligation was approximately 38.8% funded. While the Debtor is currently engaged in compiling information necessary for an updated actuarial study, the Debtor estimates that it is currently 32% funded. Debtor's financial condition continues to deteriorate, and, by management's figures, the **Debtor will deplete its assets by July, 2014 and thereafter be unable to provide any level of benefits to current and future Beneficiaries**"
|
|
|
|
Remember what it means when a pension fund goes bankrupt: it means all those people who worked, often for many years, will suddenly receive nothing, often in a period of their life when they most need support.
|
|
|
|
Note that ultimately Marianas petition for bankdruptcy got refused - as a governmental unit they are not eligible for Chapter 11. More on this and its relation to Puerto Rico situation at <http://www.distressed-debt-investing.com/2013/10/distressed-debt-investing-puerto-rico.html>
|
|
|