GUAM HOSPITAL OWES RETIREMENT FUND $7 MILLION

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Lawsuit alleges Guam Memorial not making required contributions

By Brett Kelman HAGÅTÑA, Guam (Pacific Daily News, April. 11, 2011) – In Guam, a class-action lawsuit that demands Guam Memorial Hospital (GMH) pay an estimated US$7 million in allegedly unpaid retirement contributions has been filed in the Superior Court of Guam.

The lawsuit, which was filed Friday, asks a judge to order the hospital to make employee and employer contributions to the Government of Guam Retirement Fund for the years 1996 to 1998, 2000 to 2003, 2010 and 2011.

According to the lawsuit, the hospital has allegedly failed to make appropriate payments into the Retirement Fund retirement contributions for employees on both the Defined Benefit (DB) and the Defined Contribution (DC) plans.

Although funds are deducted from employees' paychecks, the deductions haven't been deposited into the Retirement Fund as they should be, and other employer contributions simply aren't made, the lawsuit alleges.

"Defendant Guam Memorial Hospital Authority (GMHA) has had throughout the years a continuous pattern of failing to pay employees and employer contributions for the DB plan and the DC plan, the lawsuit states. The cumulative Retirement Fund debt of GMHA due to GMHA's failure to pay such contributions has varied over the years, but it has amounted to millions of dollars in principal, penalties and interest."

The lawsuit estimates the debt totals about US$7 million. Although the hospital has made some payments into the Retirement Fund, this balance remains "outstanding, unsettled and unpaid," the lawsuit states.

The lawsuit has been filed on behalf of a class represented by GMH Chief of Admissions Lourdes Tenorio, who has been an employee of the hospital since 1987. Since it is a class-action suit, a victory could have an impact on all GMH employees with unpaid contributions.

Tenorio's attorney is Ignacio Aguigui, who works at the law firm of Lujan, Aguigui and Perez. On the same day this lawsuit was filed, Aguigui filed another class-action lawsuit in the District Court of Guam seeking that GovGuam pay about US$269 million in unpaid tax refunds.

New leadership at the Guam Memorial Hospital has acknowledged unpaid contributions.

In February, newly appointed GMH interim Administrator Rey Vega said the hospital owed US$7 million to the Retirement Fund. A report released by the Office of Public Accountability the day before said that the lack of payments hurt employees and exposed the hospital to "civil and criminal liability."

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