GCA Title 4, Chapter 8
4 GCA PUBLIC OFFICERS AND EMPLOYEES CH. 8 RETIREMENT OF PUBLIC EMPLOYEES
CHAPTER 8 RETIREMENT OF PUBLIC EMPLOYEES
NOTE: P.L. 23-042:1 (Sept. 29, 1995) created a new Defined Contribution Plan for all government employees hired after October 1, 1995, and allowed certain employees participating in the existing retirement system to change to the new plan. This public law codified existing provisions of Chapter 8 (§§ 8101 -8172) into Article 1, and designated the new Defined Contribution Plan as Article 2. The Compiler altered the numerical scheme from P.L. 23-042 to harmoniously fit the chapter, in accordance with the authority granted by 1 GCA § 1606. 2025 NOTE: Pursuant to 5 GCA § 1510, I Maga’hågan/Maga’låhen Guåhan means the ‘Governor of Guam’ and I Maga’håga/Maga’låhi means the ‘Governor.’ Pursuant to 2 GCA § 1101, I Liheslaturan Guåhan means the ‘Guam Legislature.’
- Article 1 Defined Benefit Plan [Old Plan]
- Article 2 Defined Contribution Retirement System [New Plan]
- Article 3 Deferred Compensation Program
- Article 4 Welfare Benefit Plans
- Article 5 Defined Benefit 1.75 Retirement System
- Article 6 Guam Retirement Security Plan (GRSP) [Repealed]
ARTICLE 1 DEFINED BENEFIT PLAN [OLD PLAN]
4 GCA PUBLIC OFFICERS AND EMPLOYEES CH. 8 RETIREMENT OF PUBLIC EMPLOYEES
4 GCA PUBLIC OFFICERS AND EMPLOYEES CH. 8 RETIREMENT OF PUBLIC EMPLOYEES
§ 8101. Retirement Fund: Purpose.
The purpose of the Fund is to provide retirement annuities and other benefits for the employees of the government of Guam who become aged or otherwise incapacitated, and widows’ annuities and other benefits to the dependents of such employees, thereby enabling the employees to accumulate reserves for themselves and their dependents to meet, without prejudice or hard ship, the hazards of old age, disability, death and termination of employment, with the objective of encouraging qualified personnel to enter and remain in the service of the Government, thus effecting economy and efficiency in the administration of the Government. SOURCE: GC § 4200.
§ 8101.1. Statement of Legislative Concern.
(a) The actuarial valuation of the Government of Guam Retirement Fund issued October 9, 1992 by, Deloitte & Touche expressed concern that ‘the Fund benefit levels are excessive in comparison to most other government retirement systems. Benefit levels and retirement policy should be reviewed and benefits levels adjusted to match this policy. Because it may be difficult to decrease benefit levels for current members, it may be necessary to maintain current plan benefit levels for current government employees
4 GCA PUBLIC OFFICERS AND EMPLOYEES CH. 8 RETIREMENT OF PUBLIC EMPLOYEES
while establishing a new plan for all new members. In establishing benefit for a new plan, generally accepted retirement income level standards should be observed.’ I Liheslatura finds that the concern expressed by the independent actuaries is a warning that the Fund may be jeopardized if the benefits it provides to its members are not reasonably related and restricted to the resources from which benefits may be paid. Delay in examining this issue may lead to implementation of a plan for new members with benefits sharply disparate from those provided to present members. I Liheslatura concurs with the recommendation of the actuaries that the Plan’s benefit levels and retirement policy should be reviewed and recommendations made to I Liheslatura for enactment of such statutory changes as may be necessary. (b) No later than June 30, 1993, and not later than every two years thereafter, the Board shall submit to I Liheslatura its recommendations of amendments that need be made to the law establishing the Fund to protect and preserve the actuarial soundness of the Fund for the benefits of all its members. SOURCE: Added by P.L. 22-006:12 (Mar. 29, 1993). 2025 NOTE: Reference to the ‘Legislature’ replaced with I Liheslatura pursuant to 2 GCA § 1101.
§ 8101.2. Tax Qualification Requirements.
(a) The Fund shall maintain its status as a tax-qualified governmental pension plan under Section 401(a) of the Code. As used in this Article, ‘Code’ means the United States Internal Revenue Code of 1986, as amended, applicable to Guam under the mirror provisions of the Guam Income Tax Code. (b) The Fund shall be administered in accordance with the requirements of Section 401(a)(1), (2), (7), (8), (9), (16), (17), (25), (31), and (37) of the Code, as such provisions, as amended, apply to a governmental pension plan sponsored by the government of Guam. Without limiting the generality of the foregoing and notwithstanding any other provision of this Article to the contrary: (1) In accordance with Sections 401(a)(1) and 401(a)(2) of the Code, the Board shall hold the corpus and income of the Fund in trust, and at no time prior to the satisfaction of all liabilities with respect to members and their beneficiaries shall any part of the corpus or income of the Fund be used for, or diverted to, purposes other than for the exclusive benefit of the members and their beneficiaries. (2) In accordance with Section 401(a)(7) of the Code, in the event of the termination of or complete discontinuance of contributions to the Fund, the rights of all members to benefits accrued as of the date of such termination or discontinuance, to the extent then funded, shall be fully vested and nonforfeitable. (3) In accordance with Section 401(a)(8) of the Code, benefits forfeited by a member for any reason shall not be applied to increase the benefits any other member or beneficiary would otherwise receive under this Article. (4) All benefit distributions shall be administered in accordance with a reasonable good-faith interpretation of Section 401(a)(9) of the Code. The following describes the statutory requirements of Section 401(a)(9) of the Code: (A) The member’s entire interest shall be distributed to the member no later than the member’s required beginning date, or the member’s entire interest must begin to be distributed to the member no later than the member’s required beginning date and must be pa id over the life of the member, or the lives of the member and a designated beneficiary (or over a period that does not extend beyond the life expectancy of the member or the life expectancy of the member and a designated beneficiary). The ‘required beginning date’ is April 1 of the calendar year following the later of (i) the calendar year in which the member attains age 70½, or
4 GCA PUBLIC OFFICERS AND EMPLOYEES CH. 8 RETIREMENT OF PUBLIC EMPLOYEES
(ii) the calendar year in which the member retires. (B) If the distribution of the member’s interest has begun in accordance with Paragraph (A) and the member dies before the member’s entire interest has been distributed, the remaining portion must be distributed at least as rapidly as under the method of distribution being used to satisfy Paragraph (A). (C) If the member dies before distribution of the member’s interest has begun under Paragraph (A), the member’s entire interest shall be distributed, or begin to be distributed, no later than as follows: (i) If the member’s surviving spouse is the member’s sole designated beneficiary, distributions to the surviving spouse shall begin by December 31 of the calendar year immediately following the calendar year in which the member dies, or by December 31 of the calendar year in which the member would have attained age 70½, if later; (ii) If the member’s surviving spouse is not the member’s sole designated beneficiary, distributions to the designated beneficiary shall begin by December 31 of the calendar year immediately following the calendar year in which the member died, and shall be paid over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary); or (iii) If there is no designated beneficiary, the member’s entire interest shall be distributed by December 31 of the calendar year containing the fifth anniversary of the member’s death. (D) All death benefits shall be administered to comply with the incidental death benefit requirement in Section 401(a)(9)(G) of the Code. (5) In accordance with Section 401(a)(16), benefits paid from, and mandatory employee contributions made to, the Fund shall not exceed the maximum benefits and the maximum annual additions, respectively, permissible under Section 415 of the Code with respect to governmental plans. (A) Specifically, the ‘annual benefit,’ which is a benefit payable in the form of a straight life annuity, may not exceed the dollar limit described in Section 415(b)(1)(A) of the Code, as automatically adjusted for increases in the cost of living under Section 415(d) of the Code. For benefits payable in the plan year ending September 30, 2010, the dollar limit is 49,000. The second limit is the compensation limit
4 GCA PUBLIC OFFICERS AND EMPLOYEES CH. 8 RETIREMENT OF PUBLIC EMPLOYEES
described in Section 415(c)(1)(B) of the Code which provides that the annual additions may not exceed 100% of the member’s ‘Section 415 compensation’ for the limitation year. (C) ‘Section 415 compensation’ means the member’s Box 1, W 2 earnings for the year, modified to include any pre-tax elective deferrals pursuant to Sections 403(b), 457(b), 125, or 132(f)(4) of the Code. Generally, Section 415 compensation does not include amounts paid after severance from employment. However, Section 415 compensation does include amounts paid by the later of 2½ months after the member’s severance from employment or the end of the limitation year that includes the date of the member’s severance from employment if the payment is regular compensation for services during the member’s regular working hours, or compensation for services outside the member’s regular working hours (such as overtime or shift differential), commissions, bonuses, or similar payments, and, absent the severance from employment, the payments would have been paid to the member while the member continued in employment with the government. Section 415 compensation also includes any payments to or for the benefit of a member who does not currently perform services for the government by reason of qualified military service, as defined in Subsection (9) of this Section, to the extent those payments do not exceed the amounts the member would have received if the member had continued to perform services for the government, rather than entering qualified military service. Section 415 compensation also includes “differential wage payments” within the meaning of Section 3401(h)(2) of the Code with respect to the period during which the member is on active duty in Qualified Military Service. Finally, Section 415 compensation includes payments awarded by an administrative agency, or court, or pursuant to a bona fide agreement by the government to compensate a member for lost wages. Such payments for back pay are treated as Section 415 compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included as Section 415 compensation under this Subsection. (6) In accordance with Section 401(a)(17) of the Code, for purposes of calculating contributions payable to the Fund and benefits payable from the Fund, ‘salary,’ ‘annual salary,’ and ‘average annual salary’ shall be subject to the annual limit on compensation under Section 401(a)(17) of the Code, which limit is adjusted automatically for increases in the cost of living under Sections 401(a)(17)(B) and 415(d) of the Code. For the plan year ending September 30, 2010, the limit is 500 (or such other minimum amount required under the Code or Treasury Regulations) paid directly in a ‘direct rollover’ to an ‘eligible retirement plan.’ For purposes of these rules, the following definitions apply: (A) ‘eligible rollover distribution’ means any distribution of all or any portion of a member’s vested benefit, except that an eligible rollover distribution shall not include: (i) any distribution that is one of a series of substantially equal periodic payments made no less frequently than annually for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distribu tee’s beneficiary, or for a specified period of ten years or more; (ii) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and (iii) the portion of any distribution that is not includible in gross income. Notwithstanding the foregoing, a distribution shall not fail to be an eligible rollover distribution merely because the distribution consists of after-tax employee contributions that are