New hybrid retirement system could finally come to life

by Ken Quintanilla

Guam - Within the first day of their new term, senators introduced over a dozen new bills. However, among the 17 bills, one creating a new hybrid retirement system has actually been in the works for over 10 years.

Could a new year finally see the passage of a new hybrid retirement system by lawmakers? The Government of Guam Retirement Fund's board treasurer Gerard Cruz sure hopes so. "There's a lot of passion behind this bill on both ends and sometimes passion gets ahead of us fortunately we have had some time to pass and cooler heads will prevail," he said.

Time is an understatement as the bill has actually been in the works for more than decade. Vice Speaker B.J. Cruz introduced Bill 2 on Monday immediately following the senatorial inauguration. In a release, he says the bill is the same hybrid plan that was the focus of his work during the final months of the last term and remains untouched. "It's one that was prepared and written by the Retirement Fund, so if it is going in, in its same form then we're in support of it," he shared.

The old bill made it on session floor but was sent back to committee. Several roundtables on the hybrid plan followed inclusive of some heated exchanges but ultimately died in committee with the end of the term. "So we know, and we've been contemplating this issue for going on more than 10 years now and we thought this through in 2004 that the current state of the DC plan given that there is no alternative, there is no floor is creating a class of workers that are going to be employed for 30 years and upon retirement with not have enough to retire so we know there's an impending issue that's on the arisen that needs to be addressed," he said.

According to a release from the vice speaker, the reintroduced bill is untouched. The proposed hybrid plan would be available as a retirement plan option to GovGuam employees and mandated for new hires on or after January 1, 2016. It would also include both a defined "floor" of benefits and a deferred compensation program as the defined contribution component. Cruz says this issue is not only critical for future generations of retirees, but most importantly for those who are retiring today.

"So we think it's important because have 12 or so thousand employees in the government of Guam who at some point in the future are going to retire and depending on the DC plan in order to carry them through retirement we know that currently the statistics are that the average balance is round $40,000 and the average age is around 40 years old so we know that they're not going to have enough, so we see it coming," he said.

Cruz admits the bill is complex in nature and something that will take more than one sitting to understand at first. A public hearing date on the measure is forthcoming. You can read the bill on GuamLegislature.org.

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