1. What is the function or purpose for the Marianas Public Land Trust?
The Marianas Public Land Trust functions to manage the funds it receives from the Marianas Public Land Corporation or its successor entities from the lease of public lands.
2. What is the function or purpose of Marianas Public Lands Corporation or its successor entities?
The Marianas Public Land Corporation and its successor entities (MPLA and DPL) function to administer the Commonwealth's public lands for development, homesteading, and land use planning. It functions as a Constitutional trust to receive money as a trustee for the people of the Commonwealth who are of Northern Marianas descent. The annual net revenues after expenses for administration are to be distributed to the Marianas Public Land Trust.
3. How and when was the Marianas Public Land Trust organized?
The Marianas Public Land Trust is a product of the Constitution of the Northern Mariana Islands and the trust entity identified in the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the Untied States of America. Both of these documents became effective on January 9, 1978, but it was not until 1983 that the Trust was established. The lease of the lands on Tinian, Tanapag Harbor and the island of Farallon de Medinilla did not occur until 1983, which precipitated the formation of the Trust.
4. What is the operating structure for the Marianas Public Land Trust?
The Trust is administered by a board of trustees consisting of five members three of which are from Saipan, one from Tinian and one from Rota. Of the five members, one must be a woman and at least one shall be of Carolinian descent. The Trust also employs an office staff of two to handle the day-to-day administration activities. The Trust has also contracted money and financial management mavens of their respective specialties.
5. How does the Marianas Public Land Trust benefit the Commonwealth?
The Commonwealth is benefited in several ways. First, the Trust has two income beneficiaries. They are the Commonwealth General Fund and the American Memorial Park. These beneficiaries are established in the Constitution and the Covenant. As of September 30, 2006, the Trust since inception has distributed a total of $35,537,530 to the Commonwealth General Fund and $4,067,842 to the American Memorial Park. Secondly, the Trust has grown the original principal contributions of $26,942,602 to a current value of $68,182,171. This 2.5 times multiplier has been done while distributing its income each year.
6. What are the guidelines for investment administration of the Trust?
The Constitution requires the Trustees to “…make reasonable, careful and prudent investments’ and holds them to “…strict standards of fiduciary care”. To meet these requirements, the Trustees have adopted and employ the best practices as described in the Prudent Investment Practices, A Handbook for Investment Fiduciaries. This reference illustrates the Prudent Investment Process, which is adhered to by the Trust.
7. How are investment decisions made?
In conjunction with the Prudent Investment Practices, the Trustees have developed an Investment Policy Statement outlining the expectations, objectives and guidelines for the investments. The investment structure is defined to include the asset classes, investment management styles, and asset allocation to properly manage risk, produce sufficient diversification and total investment return over the long term. Discretionary money managers are hired based upon the styles and asset allocations to make the investment decisions. Their performance is measured and reviewed by the Trustees.
8. Why does the Marianas Public Land Trust hire independent money management experts?
The Prudent Investment Process “safe harbor rules” require the use of experts to make investment decision. To do otherwise would be a violation of the fiduciary duty standards. It is the Trustees obligation to monitor the activities of the experts.
9. Why the Marianas Public Land Trust assets are invested off-island?
The Prudent Investment Process dictates the development and implementation of an Investment Policy Statement, which controls how the assets are to be invested in order to manage risk and meet the objectives of the Trust for its beneficiaries. Diversification and obtaining a risk-adjusted rate of return can only be achieved through investment in marketable securities.
10. What are “ETI’s”?
ETI is an acronym for “economically targeted investment” and is generally refers to “social-Investing” where the object is not to receive a risk-adjusted rate of return but is to achieve a social purpose. The Marianas Public Land Trust refers to this term in relation to its local investments.
11. Why can’t all of the Marianas Public Land Trust funds be invested locally?
To invest all of the MPLT funds locally would be a violation of the prudent investments standards that are mandated by the Constitution. Investing locally is “social-investing” and it should only be a minor allocation of the total portfolio.