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Retirement Fund, Adelup plan to work together

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by Ken Quintanilla

Guam - While the Government of Guam Retirement Fund had opposed provisions in the governor's spending cuts bill relative to its constituents during today's public hearing, both the Fund and the Governor's Office have stated they are open to meeting where both parties could benefit.

Bill 507 proposes an early retirement program and an extension of the amortization period to pay down the unfunded liability by 10 years with a proposed savings of $60 million. During Tuesday's public hearing the Retirement Fund noted these provisions could have significant and negative impacts. During today's first Retirement Fund meeting since the hearings, director Paula Blas noted they have been in communication with the Calvo Administration, saying, "So that's basically how we're moving forward with it, is kind of helping them find that place so that it will be cost-neutral to the fund and still realize something on their side."

Governor Eddie Calvo meanwhile says from the very beginning, he has been open to options in finding other avenues in getting out of this deficit and becoming structurally and fiscally balanced. He is willing to sit down with the Retirement Fund to meet in the middle and look at the numbers and different scenarios. "So with that in mind, I look forward toward discussions with the Retirement Fund, but I hope that this doesn't mean that the Legislature is not sticking their heads into the sand. They're the policymakers," he said.

Calvo hopes Vice Speaker B.J. Cruz isn't just leaving it up to the Administration and the Retirement Fund to come up with a plan saying its ultimately up to the Legislature to take action on his spending cuts bill whether amending it or not. And for every dollar taken out of the equation, other options have to occur in reducing spending. He said, "And then if made known, then the legislature has the responsibility to make up for that difference."

Calvo says while the Retirement Fund may oppose the proposal, he understands their fiduciary responsibility is to the Fund. However, with the Retirement Fund in the NMI moving toward a declaration of bankruptcy, Calvo says it's all attributed to the collapse of their General Fund and doesn't want to see that happen here.

"If a General Fund collapsed, everything else collapses with that, and that is my primary responsibility," he said.

Meanwhile, the ultimate purpose of the spending cuts bill is to help the government pay off tax refunds. And with the Attorney General's Office saying the government should not be held at a six-month deadline relative to its ongoing tax refund lawsuit, Calvo says it could have been possible had the legislature followed through with his original plan to pay out all tax refunds. He hopes the Legislature - namely the Democratic leadership - will work with the Administration to correct the current deficit and help get back on a structural future.  

"They're kind of like Humpty Dumpty - they're made the egg fall off the wall and now its cracked into pieces, I'm trying to fix the egg, and glue it with as much crazy glue as possible but it needs some tough decisions," he said.

And with the new fiscal year starting on Monday, Governor Calvo says he will continue the 15% reserve he put on department heads. He adds if the Legislature doesn't move forward on some of the measures in Bill 507, then it doesn't leave many options available relative to voluntary reduction of personnel as opposed to layoffs.

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