Governor Calvo: Hybrid Retirement Plan falls short
With a hybrid retirement plan that will add to the $1.3 billion unfunded liability to the Government of Guam Retirement Fund while to failing to deliver on its promises, the Governor says he will support Congresswoman Madeleine Z. Bordallo’s Social Security legislation, HR 36-42.
“Not only does this hybrid retirement plan, DB 1.75, rely on assumptions and old data, it falls short in ensuring – to borrow a phrase from Vice Speaker Cruz – that GovGuam employees retire with dignity,” the Governor stated.
Congresswoman Madeleine Z. Bordallo’s legislation provides badly needed support to the hybrid retirement plan, which is supposed to go into effect in 2018.
“I believe that your bill, when approved, coupled with a better plan to fix the hurriedly passed Hybrid Retirement plan, is a significant step towards helping hard working local government employees who dedicate their lives to public service,” the Governor wrote.
“GovGuam employees deserve our support and the opportunity to retire not only with dignity but more importantly with a pension level sufficient for their needs. The next generation of employees and our taxpayers deserve our diligence in creating a plan built from smart financial management so that our taxpayers are not crippled by an additional substantial increase to the Government of Guam Retirement Fund’s unfunded liability.”
The current DC Retirement plan falls short of the original expectations. It was touted as a panacea to what was then an incredibly costly Retirement plan that placed the Retirement Fund, and GovGuam’s finances in jeopardy. The Retirement Fund’s $1.3 billion in unfunded liabilities was already slung like an albatross on the necks of our retirees and taxpayers. Vice Speaker Cruz’s plan added to that burden.
“This hybrid plan goes into effect in 2018 when I have left office,” Governor Calvo said. “But I cannot in good conscience allow the people of Guam to sit without a solution. All Vice Speaker Cruz had to do was wait while we came up with a strong and sure solution to retirement based on facts and up-to-date information. But he childishly insisted on pushing this legislation through without thoughts of consequences.
“I want to thank Congresswoman Bordallo for being that voice of reason and working with my administration towards a real solution,” the Governor stated.
