by Sabrina Salas Matanane
Guam - Armed with their consultants, representatives from the Government of Guam Retirement Fund testified in opposition to Bill 507 during Tuesday night's roundtable discussion. The legislation includes two provisions related to the GGRF; (1) an early retirement program, and (2) and extension of the amortization period to pay down the unfunded liablity by ten years. The Calvo administration maintains that combined the provisions would cut spending by more than $60 million.
Government of Guam Retirement Fund's lead investment consultant, Wilshire, Consultants has said the bill would have significant and negative impacts.
During last night's roundtable meeting, GGRF Board chair Joe San Agustin testied that he was not sure how the Fund got itself into the middle of all this and said that it was not fair to ask it's 12,000 members to bail out the government of Guam. The Board Chairman said the Bill puts a dagger into the heart of the Retirement Fund so that it bleeds itself to death. San Agustin said the Governor should use his Organic Act Authority and reorganize and restructure the entire government of Guam even if it required a reduction in force or RIF.
Governor Calvo in a press release has said that furoughs and layoffs is a last resort and prefers to allow employees to voluntarily separate through an early retirement program, "we can't be heartless about this," said the Governor. "The Retirement Fund board leadership may not care about 3,000 jobs, but I do. I don't want to put our people out of work. They should also be concerned about that many employees separating from service because that means millions less in contributions to the Retirement Fund. I'm hoping the legislature does not agree with this line of logic from the board leadership because they previously agreed with me that layoffs should be a last resort," Calvo added.
Meanwhile GGRF member Gerard Cruz said the bill in its current form is very risky, but said that the GRRF was willing to brainstorm for ideas and can run some numbers and maybe find a happy medium. He told lawmakers that the GGRF will work with the Legislature and the Administration, but Bill 507 as presented in its current form, from GGRF's standpoint, is determinental and that it's very difficult for them to stand behind it.
Vice Speaker BJ Cruz is giving an additional ten days for the Adminsitration to work with the Retirement Fund to come up with alternatives and to report back to the legislature. Meanwhile the public is invited to provide input on the spending cuts bill Wednesday at 5:30pm in the Legislature's public hearing room.