Fund addresses Furlough Friday concerns
Guam - The Government of Guam Retirement Fund is defending the three proposals they brought to the table to save the government millions of dollars. The Furlough Friday suggestion was quickly opposed by the Administration and the Legislature.
The Retirement Fund still wants the Administration to give some consideration to the other two proposals.
"Respectfully to the Governor, the three alternatives that the Fund actually put forth were basically just that they were ideas," said Retirement Fund director Paula Blas. She reacted to Governor Eddie Calvo's special address, delivered yesterday, in which he strongly opposed the Retirement Fund's suggestion of furloughing one Friday every pay period for GovGuam employees adding he'd veto any bill including such provision.
Blas says furloughs are never a popular idea but its one of three alternatives she hopes the Guam Legislature and the Calvo Administration can consider as well. The other ideas include both a voluntary separation incentive program and a hybrid program along with implementing a pension bond.
"But since there was no definitive amount that was actually given to us, we just put options in place, did the analysis on it, came up with some real numbers with what he could actually possibly save, but they were just alternatives," said Blas.
And while the governor would instead prefer his proposal to still be considered, Blas says the Retirement Fund stands firm in not supporting the proposals outlined in the Governor's Spending Cuts Measure, Bill 507.
She does however offer clarification to various statements made in the governor's address including how the Fund's return on investment is well below the state average. She says contrary to what is said, she believes it isn't the case. "As for the Fund's last five year performance, the investment results actually placed the Fund in the top 15% within U.S. public pension plans and I guess just based on that, we can't really call that bad," he said.
She adds the plans were a result of work through its actuaries, consultants and staff not commissioned by the Legislature as claimed by the governor. "We weren't putting up forth the alternatives as a political player in this, we basically looked at being neutral in this sense and some of the things we did say may not have been as popular but it had to be put out there because you could use this as a viable option," he said.
Late this afternoon, BBMR director John Rios wrote to Vice Speaker Cruz noting that Governor Calvo has agreed to a smaller early retirement program along with the ten-year temporary extension of the amortization period which would essentially move the pension fund deadline from 2031 to 2036.
He adds while the Administration opposes the Furlough Fridays suggestions, they do wish to pursue the Earned Retirement Incentive Program, they do wish to pursue the ERIP alternative suggested by the Retirement Fund to members who are within five years of reaching full retirement services. He adds they do have preliminary reservations about the creation of a hybrid system as suggested by the Fund.
He says this compromise if accepted by the Legislature, represents a fraction of the spending cuts the governor needed from the Legislature but ultimately a step in the right direction.