A campaign that apparently is meant to misinform Government of Guam employees on the Defined Contribution plan was called to the attention of the Governor today.
In an Aug. 26 letter to DC members, who are current GovGuam employees, Government Guam Retirement Fund Director Paula Blas CLAIMS the hybrid plan, DB 1.75, ensures DC members CAN RETIRE COMFORTABLY. She also states it will NOT ADD TO GOVGUAM COSTS.
Governor Calvo is concerned about the validity of these claims considering the concerns shared with her by DOA Director Christine Baleto, AND in light of information from a preliminary actuarial report.
He reiterated his above concerns to Retirement Fund board Chairman, asking the Board:
- Is the GGRF Board of Trustees in support of vetoed Bill 2-33 despite the concerns the administration has outlined? It is important that members know their official position on this matter. The bill will NOT help DC members AND it will ADD AT LEAST $173 MILLION to the Retirement Fund’s $1Billion unfunded liability.
- If you are supporting the bill, can you guarantee the people of Guam, DC members and retirees that the bill lives up to what Vice Speaker Cruz and Senator Mike San Nicolas and GGRF Director Blas’ letter claims?
- In the media, it is reported that the Board HAS NOT stated a position. So did GGRF Director Blas send the letter without your approval? And if so, then are there concerns of ethical or procedural violations? Also, if a DC member is negatively impacted as a result of taking Paula’s advise, would she be personally liable to make the member whole?
- Does GGRF Director Blas’ lobbying and prompting of DC members in her letter, along with the ADDITIONAL $173 million in unfunded liability, open the Retirement Fund, and possibly the Government of Guam, to a lawsuit by DB members?
Adding to the unfunded liabilities would potentially put the Retirement Fund’s and the Government’s finances at risk because GovGuam, through its taxpayers, would have to pay more out of General Fund coffers. Additionally, the increased unfunded liabilities would spark the NEGATIVE ATTENTION of investors and bond rating agencies. And with the cloud of PROMESA hanging over us, it could ADVERSELY IMPACT OUR CREDIT RATING.
“We just received a preliminary report last week from an actuary that shows that this bill, among other things, would require DC members to work for 49 years to earn 85 percent of their salary. It also would ADD AT LEAST $173 MILLION to the RETIREMENT FUND’S UNFUNDED LIABILITIES,” the Governor stated.
“For these reasons alone, I fully oppose Bill 2-33 as it was passed by the Legislature and to be quite frank, I don’t know you this would not cause at least some pause and consideration. From our perspective, again based on the facts we have before us, this bill fails to achieve its goals.”
In a letter from DOA Director Christine Baleto to Ms. Blas last week, Director Baleto notes that it looks as though ONLY THE RETIREMENT FUND could benefit from the passage of the hybrid bill. Not the DC members as purported and certainly NOT THE TAXPAYERS OF GUAM.