Guam – Guam Retirement Fund Board Chairman Joe T. San Agustin threatened legal action if the Legislature approves Section 3 of the Governor’s proposed $36 million dollar supplemental budget request.
San Agustin testified before Senator Ben Pangelinan’s Budget Committee this morning [Thursday].
Section 3 of the Governor’s Supplemental Budget Bill number 184 proposes to divert about $15.4 million dollars in future future retirement fund contributions in order to reprogram those funds to cover the current cash shortfall.
“Section 3 of Bill 184 is highly irresponsible,” said San Agustin.
Section 3 of the Supplemental Budget Bill is based on an April 2011 audit released by the Guam Office of Public Accountability which refers to an “unintended windfall” of “up to $18.1M in interest payments” which GovGuam “overpaid to the GGRF for outstanding and past due retirement contributions of Guam Memorial Hospital Authority [GMHA] and Guam Department of Education [GDOE].”
While acknowledging GovGuam’s fiscal crisis, San Agustin strongly disputed the OPA’s suggestion that the retirement fund had received an “unintended windfall.”
He told the Budget Committee this morning that “if agencies do not pay all of their employees contributions, those employees will miss out on market gains. Those agencies like GMH will be in default, and the fund will take legal action.”
The GovGuam retirement fund has already initiated legal action against the Hospital Authority for its failure to pay retirement benefits last year. A second class action lawsuit is also pending against GMHA for failure to pay retirement fund benefits.
“GMH’s practice of stealing from the employees is intolerable and unlawful,” said San Agustin.
In response, BBMR Director Manglona said that “there is no reason why we should doubt” the OPA’s conclusions that the Retirement Fund received over-payments.
However, San Agustin’s strong testimony against the proposal gave pause to the lawmakers in attendance.
Vice Speaker B.J. Cruz turned to the BBMR Director and asked: “If the legislature accepts the testimony of Chairman San Agustin … and we decide to remove Section 3 … should we dispense with the rest of this hearing and allow you to go back and find $15 million dollars someplace else?”
Manglona responded “That’s the role of this legislature to accept this proposal and its your decision whether to accept the proposal that is before you.”
Manglona told the Committee that the Administration hopes for an answer from the Legislature to its Supplemental Budget request by the first week of June.