Guam - They said it wouldn't be a popular decision, and evidently it's true. And the Government of Guam Retirement Fund is concerned how the Spending Cuts Task Force's recommendations may ultimately jeopardize its over 15,000 members.   

"Everybody's getting frustrated because we're all in the dark," said Joe T. San Agustin. "Now, is it fair to put 15,000 members, put $1.6 billion in assets in the dark?" According to San Agustin, who chairs the Retirement Fund's board of directors, the devil is in the details. Wednesday the Calvo Administration cleared its spending cuts recommendations to cut $43 million annually, which included an early retirement program and the extension of the amortization period to pay down the unfunded liability.

San Agustin is upset the Fund wasn't even consulted in trying to create a program that would impact so many. "The appearance it seems to me is that the Administration is relying heavily to bail them out from the fund without any advanced communication whatsoever," he noted. He says while the Administration tries to address the government's financial situation, the Retirement Fund has a responsibility to its members and its impacts to the Fund.

"And this fund belongs to the members of the Fund - we as a trustee, have a legal and fiduciary responsibility to protect the integrity of that fund," he said.

And because there's been no communication with the Administration, he's going off the Past Early Out Program, which he says cost the Fund close to $100 million.

However, according to governor's director of communications Troy Torres, that isn't the case as this plan hasn't been a secret. "So they really can't say that they haven't had the opportunity to be part of the mix, and on top of that we took a lot of time to go to the different villages and outreach efforts," he explained.

He says as DOA estimates about 500 full-time GovGuam employees in the line agencies excluding DOE, GMH and other semi-autonomous and autonomous agencies who are within five years of retirement eligibility, it would actually save millions which evidently had overwhelming support at the village meetings.

However, for San Agustin, that isn't good enough. "I'm sorry to say that you don't discuss an issue that is affecting 15,000 members in a village meeting," he shared.

So what's next for the board? "We're asking our investment advisors to give us their reaction - what's the impact on the Fund? We're asking our legal counsel what are the legal ramifications in terms of protecting the integrity of the Fund and the members and we're asking our actuary what it will cost now and in the future," he said.

As for the Administration, Torres says he doesn't want to see the Retirement Fund jeopardized, either. "We want to work with the Retirement Fund, and we want to make this work and we want to do whatever is possible to ensure the fund is whole and to let them know that we are striving for the same thing," he said.

The final tally of cuts in spending will be known upon the completion of he proposed Early Retirement Program, which is estimated to cut between $15 million and $35 million, whereas the amortization of the unfunded liability by 10 years would cut $28.1 million government-wide."

The Governor's Office and DOA meanwhile are working on the Omnibus Fiscal Reform Package of 2012, containing all legislative authority to make and implement the cuts.