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Bronster Hoshibata Announces Final Approval of $500 Million Class Action Settlement In Retirement Fund Case

Bronster Hoshibata is pleased to announce that on October 23, 2013 the United States District Court for the Northern Marianas Islands entered final approval of a class action settlement valued at more than $500 million. The settlement protects the pensions of thousands of members of the Retirement Fund for the Commonwealth of the Northern Marianas Islands (“CNMI”). It is the first successful use of a class action settlement to resolve a public pension fund crisis.

Facing a fiscal crisis over the past eight years, the CNMI had failed to pay its annual contributions to the Retirment Fund, and the Fund faced imminent depletion of all of its assets in less than a year. The retirees (who are not members of the social security system) faced a complete cessation of all benefits as soon as June 2014.

After years of litigation with many twists and turns, Class Counsel, Margery Bronster and Robert Hatch of Bronster Hoshibata, negotiated a settlement with the CNMI in July 2013. Under the settlement, the CNMI agreed to make annual payments to enable a Settlement Fund to pay retirees at least 75% of their retirement benefits in perpetuity. The CNMI also agreed to entry of a Consent Judgment in the amount of $779 million that can be enforced if the CNMI fails to make its annual payments. This is as close to a guarantee of full performance of a settlement’s terms as a litigant can hope for.

 The reaction of Class Members to the Settlement during the approval process was remarkable. Only one objection actually seeking to block the settlement was timely submitted. A second “objection” asked the Court to approve the settlement even if Class Members opted out in sufficient numbers to eliminate the Settlement. Out of more than 4,000 Class Members, only 16 asked to be excluded from the Class. The Class’ broad acceptance of the Settlement followed extensive negative statements by the CNMI Legislature and others criticizing the Settlement and Class Counsel.

Bronster Hoshibata is very proud of this result.  Thousands of families face financial certainty in retirement that would not exist but for our efforts.