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Talks on Bill 507 continue

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by Ken Quintanilla

Guam - Even with the Government of Guam Retirement Fund's absence, the discussion continued with members of the Guam Legislature and the Calvo Administration during Monday's roundtable discussion on Bill 507. It was an intimate discussion between BBMR director John Rios and a handful of senators on to how to move forward with Bill 507 or the governor's spending cuts proposal..

After officially reading a letter from the Retirement Fund noting how they wouldn't be participating in the discussion, Vice Speaker B.J. Cruz questioned Rios wanting his perspective as the former GovGuam Retirement Fund director. "Can you put the hat back on that you had 12 years ago and try to explain to us why you think they're having problems with this and how you can assuage their concerns?" he said.

Rios noted he understood the Retirement Fund's fiduciary responsibility and spent most of the hearing explaining the differences between the alternatives. "I think we've done enough, and I think we've compromised and we said if you don't want to do a 10-year extension, we're okay with a five year that you proposed but we're not going to use it on the hybrid and increase in annuities but we want use it to pay for the early retirement and increases in survivor benefits," he said.

The Retirement Fund's alternatives included a Furlough Friday plan, a voluntary separation incentive program coupled with a hybrid retirement plan and implementing a pension bond. And while they opposed the Furlough Fridays alternative, the administration and the vice speaker proposed a compromise alternative to implement a smaller early retirement fund program limited to employees who are within five years of retiring and a 10-year temporary extension of the amortization period.

In addition to questioning whether legal action would be taken by Retirement Fund members and trustees over provisions they did not consent to, and in what was a recurring theme throughout the night, Cruz questioned Rios on the official position of the administration as it relates to the retirement fund's alternative of a hybrid plan.

"I think if the extension to 10 years would be better so we can get some savings at least the General Fund, but here you're doing just a five year for the hybrid and an increase in the annuity," he said.

Rios says he was concerned whether any plan provisions in the future can be made. He further noted he was looking at $14 million in savings on payroll alone, that the Administration's proposal was now geared to about 600 employees and the program was aimed to take effect in 2014. And while its ultimately the Legislature to decide what will remain in the bill, Cruz asked Rios to come back in a couple of days with what the Administration's thoughts on the retirement fund's opposition in hopes of reaching some final solution.

"I understand but you're original was un-researched, un-surveyed and its now completely out the door and nobody is even thinking about that, so I'm just saying what will be acceptable to you guys and would you be willing to meet the Retirement Fund on its hybrid and how you could work that with the number and you could show that," he said.

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