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By Steve Limtiaco

HAGATNA, Guam (Pacific Daily News, June 3) – Hundreds of Department of Education and Guam Memorial Hospital employees could be allowed to retire after Gov. Felix Camacho yesterday signed a law that requires the government to make regular interest payments to the Government of Guam Retirement Fund.

The new law could end a six-month ordeal for veteran hospital and public school employees who have been denied the ability to retire because their agencies owe millions in retirement contributions - money that was taken out of their paychecks but which was spent by the government on other things. The hospital owes about $16 million in retirement contributions, and the education department owes about $17 million.

"It's about time; it's well overdue," said Guam Memorial Hospital accountant Craig Schilling, who plans to retire soon and who has been monitoring government efforts to solve the retirement problem. "It's really put me in limbo, put my plans on hold, and I'm just grateful that somebody came along and decided to do something."

The hospital owes the Retirement Fund more than $54,000 for Schilling, including penalties. Having worked at the hospital for 26 years, Schilling said his plans for a second career have been put on hold by the retirement problem.

Guided by a court decision, the Retirement Fund's board of trustees on Dec. 17 decided that education and hospital employees will not be allowed to retire until the agencies pay everything they owe.

The law signed yesterday requires the Treasurer of Guam to pay the Retirement Fund at the beginning of each month what it would have earned if it had invested the missing money - about $4.6 million a year. Agencies must fully pay the missing contributions for employees who want to retire, plus interest.

The new law also prohibits the education department and the hospital from getting deeper into debt with the Retirement Fund; otherwise, employees will again be prevented from retiring.

About 300 education employees have enough years of service to retire, and about 120 of them have expressed an interest in retiring, according to education officials. About 20 hospital employees are interested in retiring, according to hospital officials.

Even though the new law is in place, education and hospital employees will not be allowed to retire until sometime in early July, which is when the government plans to make its first mandatory interest payment, said governor's spokeswoman Erica Perez. Payments are due the first of the month, with a 10-day grace period, the law states.

The hospital faces the added burden of catching up with its current retirement payments, as required by the new law.

The education department is current with its retirement payments, but the hospital yesterday was five pay periods behind, said hospital Administrator PeterJohn Camacho.

The new law also is expected to bring relief to the families of two government employees who died while waiting to retire. The families had to go without a paycheck or survivor benefits from the Retirement Fund because of the retirement freeze.

Retirement Fund Director Wilfred Aflague said the Retirement Fund's "hands were tied" and it could not process survivor benefits for those families.

He said the education department is in a better position than is the hospital. The hospital's debt to the Retirement Fund goes back several years, while the education department must make up for missing payments for 2003.

That means only a few thousand dollars is owed to the Retirement Fund for each education employee who wants to retire, while tens of thousands of dollars are owed for each hospital employee.

Speaker Mark Forbes, R-Sinajana, who wrote the new law, said employees never should have been put in this situation in the first place.

"In the future, there must not ever be a situation where a GovGuam director thinks it is a matter of discretion to them whether or not to pay the Retirement Fund. They simply must pay the Retirement Fund," Forbes said

June 3, 2005

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