REGULAR readers of this Forum section will recognize the name Joe Guthrie. He has written several Letters to the Editor recently, including one today, warning government of Guam retirees to watch out for unjustified – and in his view unjustifiable – attempts to squeeze money out of the Fund or reduce the government’s contributions to it.

Guthrie is an attorney and former assistant AG, as well as a retiree, living now in the Philippines but obviously keeping an eye on the GovGuam Retirement Fund. He warns that attempts to allow members to retire early, increase survivors’ benefits, and extend the amortization time for funding the unfunded liability are dangerous to the fiscal stability and integrity of the Fund.

One reason this interests us is that for some time now, we’ve been watching the steady deterioration of a similar retirement fund, just a couple of hundred miles north of us. That’s the one for employees of the government of the Commonwealth of the Northern Mariana Islands. It’s nearly broke, in such poor shape now that many observers and commentators expect it to actually go belly up within a couple of years, to simply run out of money and be unable to continue paying out benefits to its retirees.

In fact, the CNMI Fund’s directors themselves attempted to formally declare bankruptcy through the federal court system recently, but the petition was turned down. The judge ruled that the CNMI Fund is an inseparable component of the CNMI government, and could not unilaterally put itself into bankruptcy. Consequently, many members are trying to pull their money out of the Fund if they can.

It seems pretty far-fetched to imply that the problems of the CNMI government's Retirement Fund could somehow also happen on Guam. The GovGuam Retirement Fund is much larger, of course, with more than $1.5 billion in assets. But the political pressure being put on the Fund’s directors in the effort to reduce the government of Guam’s budget deficit is intense, placing those individuals in an awkward position.

The directors have a fiscal responsibility to the Fund, but not necessarily to the government of Guam. They are not elected to the Legislature or any other office and one could argue that they have no responsibility for GovGuam’s financial problems. On the other hand, if the government has financial problems it cannot resolve, that will inevitably have a negative effect on the Fund.

The financial problems facing this government are major. Significant budget cuts seem inevitable, with lawmakers and the Governor’s Office needing to find every single place where they can save some dollars. As they cast about for ways to trim the cost of doing government here, they may be tempted to squeeze the Retirement Fund. Guthrie is not wrong when he warns retirees to be alert to ward off anything that could damage the Fund or its members.