Guam Hybrid Retirement Plan Bill Sent Back To Committee

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Effort to replace defined contribution plan stalls for now

By Shawn Raymundo

HAGÅTÑA, Guam (Pacific Daily News, Oct. 22, 2014) – Bill 394, which would overhaul the defined contribution retirement plan for government of Guam employees, was sent back to committee by lawmakers yesterday morning for further review.

The bill would create a hybrid plan that guarantees retirees a small annuity, supplemented by the money their retirement investments have generated.

It is intended to replace the current defined contribution plan, which officials acknowledge is flawed and doesn't generate enough revenue on its own to allow employees to retire. There currently is a supplemental retirement savings plan available to employees, which allows them to save more for retirement, but few have signed up for it.

The hybrid plan, as originally introduced, would require employees to contribute twice as much toward retirement.

After several senators proposed different retirement scenarios during session last week, lawmakers recessed until yesterday so that officials in the Government of Guam Retirement Fund could complete an analysis of the bill.

Vice Speaker Benjamin Cruz, D-Piti, who introduced the bill, agreed to send it back to committee to digest the new data, the office of the vice speaker said.

Following a motion by Sen. Mike Limtiaco, R-Tamuning, to move the bill back to committee, Cruz told Speaker Judith Won Pat, D-Inarajan, he understood the complications regarding the bill and wanted to hold additional public hearings and allow for further review of data, according to his office.

Despite Cruz's hopes to get the legislation passed quickly, he would rather get the bill right than rush it through, his office said.

The late Sen. Ben Pangelinan worked with the Retirement Fund on a draft of the bill before he died.

Sen. Cruz has since taken the lead on the proposed hybrid plan.

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