“I believe Bill 266-33 is a step in the right direction” – David John President ASC Trust.
Guam – Vice-Speaker Cruz held a hearing on the latest proposal for a new hybrid retirement plan that includes the potential for GovGuam employees to receive social security.
Bill 266 was written by Senator Mike San Nicolas with the help of Vice-Speaker B.J. Cruz. The bill is a compromise between San Nicolas’ push to include GovGuam employees in the federal social security plan and the Vice-Speaker’s hybrid retirement plan. The hybrid proposal or bill 2 would predominantly be funded by increasing the amount that employees would pay while bill 266 would be funded by increasing the total amount that GovGuam would contribute but spreading it out over a longer period of time. Senator San Nicolas says this would require little to no additional appropriations.
DOA’s recently appointed acting director Christine Baleto testified on the bill saying that the administration recognizes that something needs to be done to address the challenges that GovGuam employees under the defined contributions plan face. However Baleto told lawmakers that GovGuam should conduct a cost impact analysis. “The bill later mentions that the board of trustees may extend the amortization of the accrued unfunded liability to cover this additional cost. This translates to an additional $100 million in the unfunded liability as the hybrid plan will increase as a result of GovGuam now having to cover the employee cost,” said Baleto.
ASC Trust President David John also spoke on the bill as a private citizen saying, “I believe Bill 266-33 is a step in the right direction for the following reasons, first the bill’s ultimate solutions for the needs of the government of Guam employees is to create a D.C. with a combination U.S. social security solution. I think this is a game changer.”
The GovGuam retirement fund is currently working on a cost impact analysis of bill 266.