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Senators address early retirement provision

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by Sabrina Salas Matanane

Guam - At the Guam Legislature is the biggest provision in the governor's spending cuts proposal is the focus of this evening's roundtable discussion. Bill 507 proposes an early retirement program and the extension of the amortization period to pay down the unfunded liability by 10 years. Combined they are expected to cut spending by up to $60 million.

Vice Speaker B.J. Cruz says he hopes employees will come forward to voice their concerns on the provision along with departments providing statistics of how many of their employees are thinking of retiring. "Because initially the governor thought there was only 500 and it was fairly evident that first night that there is 1,500 and that if we go throughout the government and take into account the autonomous agencies, we may be talking closer to 3,000 employees and where are we going to get six times $8 million or $48 million to pay the Retirement Fund for that obligation or is he expecting that we're going to stream that out in the extension of the unfunded liability, I don't know we'll see," he said. 

The measure is receiving opposition via written testimony submitted by the Government of Guam Retirement Fund's lead investment consultant Wilshire Consultants. They express concerns over the bill's "significant and negative impacts" to the pension agency's investment program and the resulting material increases in projected long term funding costs to the Fund. In a letter to Cruz, managing director Maggie Ralbovsky writes that while the bill is intended to reduce spending, the provisions relative to the Fund will actually increase long-term spending by an estimated $1.2 billion in Fund contributions and urges reconsideration of the provisions.

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