Special session called over GovGuam retirement plan - KUAM.com-KUAM News: On Air. Online. On Demand.

Special session called over GovGuam retirement plan

Posted: Updated:
 by Sabrina Salas Matanane

Guam - Members of the Government of Guam Retirement Fund board were at the Legislature today as senators were called into special session to begin dialogue on Bill 394. The legislation was introduced by Vice Speaker BJ Cruz based on a bill the late senator Ben Pangelinan had been working on over the last several years with the Retirement Fund to address problems with its Defined Contribution Plan.

The legislation would create a hybrid retirement system that includes both a defined "floor" of benefits and a defined compensation program as the defined contribution component. While current DC retirement plan members only receive benefits equal to the growth of their investment, hybrid plan members would receive a guaranteed annuity based in part on a formula that takes one and three quarters percent of average annual salary for each year of service.

Retirement Fund treasurer Gerry Cruz said, "Bill 394 creates wheat we think is a solution to the DC plan we know that there are $40,000 is the average size of the plan and the average of the individuals in that plan is 40 and so it just looking at the point in when they're going to retire we know that its not going to be enough we know there's a problem this bill hopes to create a floor by creating a base annuity form in hopes of solving that problem."

The Retirement Reform Bill also allows current DC retirement plan members to elect to transfer their retirement account balances into the hybrid plan in exchange for creditable years of service toward retirement.  

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