Guam State Employees’ Merit Bonuses Draw Criticism

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Guam State Employees’ Merit Bonuses Draw Criticism Senators question motive for retroactive payments from 1991

By Jerick Sablan

HAGÅTÑA, Guam (Pacific Daily News, March 8, 2013) – The payment of merit bonuses to government of Guam employees drew some heated remarks from island senators.

Several top government finance officials met with senators yesterday for a Special Economic Services meeting at the Guam Legislature to discuss various financial issues, including concerns about the Government of Guam Retirement Fund.

However, the discussion got heated when senators asked about the government's debt, particularly the payment of merit bonuses.

Vice Speaker Benjamin Cruz questioned the motive behind the payments and the reasoning for repayment since 1991. He said several agencies are only looking to repay several years of merit bonuses.

Department of Administration Director Benita Manglona said it was necessary to pay the employees because it was a liability. "It needs to be paid," she said.

Retirees unconsidered

The law creating the merit bonus payment states that "all positions officers and employees, classified and unclassified, inclusive of the Executive and Judicial Branches, autonomous agencies and semi-autonomous agencies, public corporations, and other public instrumentalities of the government of Guam," are entitled to receive the 3.5-percent bonus upon earning a superior rating.

In December 2012, the government paid $4.5 million in merit bonuses to some GovGuam employees. However, the government still owes millions to other employees.

Cruz said the December payments didn't take retired employees into consideration, which he said was not right. He said he's had several retirees visit him to ask why they haven't been paid merit bonuses owed to them.

Manglona said the current system doesn't allow them to see inactive employees and that personnel would need to go through files.

However, she noted the government was able to pay obligations that haven't been paid in years including tax refunds and the merit bonuses.

Retirement Fund

Another big issue was the Government of Guam Retirement Fund, which is facing $1.6 billion in unfunded liability.

Public Auditor Doris Flores Brooks said that at this current rate, many GovGuam retirees won't have enough money to live after retirement.

"We as a government have to recognize our obligation to these retirees," she said.

Contributing to the problem is the fact that GovGuam doesn't pay into Social Security, so career GovGuam employees can't collect those benefits when they retire. Brooks said she recommends the government look at Social Security as a viable option.

She said some retirees will cash out only about $8,700 when they retire.

"How can they live once they retire from the government of Guam?" she asked.

Although the Retirement Fund has recommended the implementing of a Hybrid Plan, which could give the same benefits of Social Security, Brooks said it wouldn't be a good idea.

"Given the government's track record there will most likely be another unfunded liability," she said.

The officials were asked to provide more details to the Legislature so senators could get a clearer picture of the government's finances. Senators are expected to start budget hearings in the coming months.

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