The Office of Public Accountability released its latest audit on the GovGuam Retirement Fund, noting that GMH’s failure to pay is not only affecting the hospital and GGRF, but also GMH employees.
Guam – The Guam Memorial Hospital continues to expose itself to criminal liabilities because of a $4.5 million balance owed to the GovGuam Retirement Fund. Meanwhile, the retirement fund is also facing issues of its own with the unfunded liability of the defined benefits plan. This was all part of the retirement funds latest audit.
The Guam Memorial Hospital is already facing possible litigation from the Government of Guam Retirement Fund board of trustees, which voted on February 26 to take legal action against the hospital. But in addition to a lawsuit from the retirement fund, GMH could also face civil action from their own employees.
“GMHA employees can seek enforcement assistance through the Guam Department of Labor and through the U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division,” the Office of Public Accountability states in its latest audit of the retirement fund issued on March 3.
As of February 26, the hospital owed the retirement fund $4.5 million. The OPA says that the delinquency is not only affecting the hospital, it’s also impacting the retirement fund.
The OPA notes that the retirement fund has had to liquidate defined benefits plan investments in order to cover benefit payments, assets that should remain in the retirement fund’s investment portfolio to generate interest.
For the defined contributions plan, the OPA points out that GMH’s failure to remit payment could result in harm to GMH employees’ DC accounts.
In addition to owing the retirement fund millions of dollars, they are also accruing late fees and penalties, the audit states.
But those aren’t the only issues facing the retirement fund. As with previous audits, the OPA continues to point out that the DB plan’s unfunded liability continues to grow. Back in September 1995 it was $552 million. At the end of fiscal year 2014, it grew to $1.37 billion.
“The unfunded liability is now so large that it simply cannot be ignored or put off for future generations to contend with,” the audit states. “The longer the government of Guam defers its obligation to provide full funding, the worse the problem becomes.”
The rate of return for the DB plan has also significantly decreased. In fiscal year 2014 it was at 10 percent. But for fiscal year 2015 it was less than a percent, or 0.83 percent.
Independent auditors Burger, Comer, Magliari rendered a clean audit for the Retirement Fund.
You can read the financial highlights by clicking on the file below.