GGRF presents alternative plans for spending cuts - News: On Air. Online. On Demand.

GGRF presents alternative plans for spending cuts

by Ken Quintanilla

Guam - In an attempt in reaching some middle ground with the Calvo Administration relative to the governor's spending cuts proposals, the Government of Guam Retirement Fund submitted its alternative plans in hopes of being both cost-neutral to the fund while reaping savings for the government. However, some of the plans aren't sitting too well with the Governor's Office.

The GGRF submitted three alternatives to the governor's spending cuts proposals, estimated to save about $43 million. Board treasurer Gerard Cruz said, "The proposals that we're putting forward were brought forth after the negotiation between us and the Administration. It is cost neutral to the fund so its something that the Fund can live with."

The discussion between both parties came about after the Retirement Fund testified in opposition to the governor's proposals, which aimed for an early retirement program and an extension of the amortization period to pay down the unfunded liability by a decade. The Retirement Fund's proposals implements both a voluntary separation incentive program and a hybrid retirement plan proposed under Bill 453, furloughing one Friday every pay period for government employees and lastly implementing a pension bond, which would immediately infuse a cash sum into the retirement fund allowing the government to reduce its contribution rate.

It's a result of work between its actuaries, staff and consultants.  "And so we were able to see through analysis and running through the different scenarios that the proposals, any one of the three proposals and hopefully all of them in its totality will reap the benefits and savings the governor was looking for," he said.

Governor Eddie Calvo meanwhile thanks the Retirement Fund for their advice but says their idea of "Furlough Fridays" isn't under their purview, but his.  He said, "So one of the major issues I have with the furlough, that's akin to a 32-hour workweek and I've always been against this cookie-cutter approach slicing hours particular that I have general purview over, a police department, fire department and nurses and public health. I do believe that would be detrimental to critical services being provided to our people."

BBMR director John Rios was in close communication with the Retirement Fund and says some of the alternatives look like they could work but still has some issues he wants to look into further. "Some of them will work and a combination will work but instead doing a five-year extension that they're proposing I still think we can do a ten-year temporary. It will do the same thing it just provides the general fund relief for the first five years," he said.

Cruz meanwhile says based on pure calculations, the Administration's proposal of extending the amortization period would have a substantial impact to the fund resulting in over a billion dollars in costs. He does however understand the state of GovGuam's finances. "So we need to weigh our fiduciary duties with our willingness and ability to contribute, and that's what the proposals were about. We're just trying to find a neutral ground where we weren't putting one fund that is the retirement fund in jeopardy in order to save the General Fund," he said.

Calvo says his fiscal policy team is reviewing the other alternatives but ultimately wants the Guam Legislature to decide on the bill and make the necessary amendments. Vice Speaker B.J. Cruz meanwhile will be holding a public hearing on the alternative proposals, which he hopes to announce by the end of the week.

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