Unfunded Liability of GovGuam Retirement Fund Climbs to $1.44 Billion

185

Guam – The unfunded liability of the GovGuam Retirement Fund has risen to $1.44 billion dollars, according to an audit released  by the Guam Public Auditor.

According to the audit, that means that for every dollar of Fund assets, there is only 47.3 cents available to pay future annuities.

However, the auditors point out that the unfunded liability has actually dropped from the previous year from 55.5% in FY 2009 to 52.7% last year.

“To reduce the unfunded liability,” the auditors say that “a combination of increased employer contributions and increased rates of return are required.”

Read the Retirement Fund Audit Highlights

The auditors also raise concerns about the delinquency in employee contributions from Guam Memorial Hospital. GMHA now owes the Retirement Fund $5.6 million. The auditors warn that GMH is exposing “itself to both civil and criminal penalties.”

The auditors also reported that the Fund closed FY 2010 with an $80.7 million dollars increase in net assets after the financial markets rebounded last year.

The fund had a positive return on its investments of 12.3% in FY 2010, compared to a negative 14.8% loss in the previous fiscal year.

The audit was conducted by independent auditors Burger and Comer who rendered an unqualified clean opinion of the Retirement Fund’s financial statements for FY 2010.