One of three bidders for administration of the Government of Guam Retirement Fund will be awarded the bid in February Paula M. Blas director of the Government of Guam Retirement Fund told the Journal.

Fund officials were reviewing proposals submitted for investment management and plan administration services of the 401(a) Defined Contribution Retirement System and 457(b) Deferred Compensation Plan and Benefit Administration Services of the Welfare Benefit plan for the DCRS (See "Government set to retire old ways through RFP" in the Oct. 2 2006 edition of the Journal.)

Blas she said she was not anticipating any problems. The RFP’s were originally released on Sept. 28.

Blas confirmed that three companies submitted proposals. Because the review process is still underway she said she could not say which companies submitted RFPs. She did say that "All companies have a local presence on Guam."

The Journal learned that the three companies that submitted proposals were ASC Trust Corp. Bank of Hawaii and the current administrator of the fund Great-West Retirement Services Inc.

Calls made to the Great-West office on Guam were deferred to its director of corporate affairs and financial services matters in Colorado. Phone calls were not returned as of press time.

T. Michael Hogan Jr. senior vice president and manager of the retirement plan services division of Bank of Hawaii; said "They certainly did a high quality RFP process and they’ve gotten their plan to a point where I think if selected we would have the opportunity to truly partnership with the government of Guam. In this business it does require a partnership with the provider and certainly the plan sponsor. That really excites me about this opportunity."

David J. John president of ASC Trust Corp.; also said the RFP process was well executed. "So far this RFP has been run very well. The RFP itself was very well written. We had our interview with the committee tasked with making the final selection on Jan. 23 and the meeting went very well. It is my understanding that GGRF should make their decision to the most qualified bidder some time over the next couple of weeks "" hopefully in time for their Feb. 9 board meeting."

Hogan said the Bank of Hawaii proposal brought together two strong organizations. "I thought our partnership proposal with Lincoln Financial group combined not only one of the larger financial institutions here in Guam but one of the larger retirement service providers in the country. That [partnership] could really take a lot of the hard work that the government of Guam has taken over the years to put together what they have today up to some enhanced levels."

John said that ASC was different from the other companies who submitted proposals because of its commitment to the region. "From our offices in HagÅtña ASC is the leader of retirement plan management in Micronesia. We understand the unique needs of the participants in the region and have created cutting edge services to help our participants reach their retirement successfully."

A similar RFP was initially released in April 2004 specifically asking for 401(a) DCRS Investment Management and Plan Administration services. After the release however the fund’s board of trustees said it was in the best interests of participants that the government of Guam cancel the initial RFP and issue another one that would also include management for the fund’s Deferred Compensation Plan as well as benefit administration services. Blas told the Journal that this RFP’s duties will include record keeping and administration education investments and other types of client services.

Service fees paid to the existing third-party provider in 2005 amounted to $782 602. Due to the nature of the professional services that the retirement fund contracts all of the fund’s investment management services are contracted for no specific duration. This does not mean that contracts cannot be terminated. If the retirement fund wishes it can terminate a contract with a 30-day written notice to the provider of services. At the end of 2005 the assets for the Defined Contribution Plan were $132.9 million (See chart). The unfunded accrued liability as at Sept. 30 2005 was $1.28 billion. Blas said the fund did not have more recent data. MBJ

Assets
Total Accounts
Contributing Accounts

401(a) Defined Contribution Plan

≈ $150.5 million
8 871
6 998

457(b) Deferred Compensation

≈ $9 million
984
830

Defined Benefit Program*

$1.5 billion
11 000
4 200

*The government of Guam’s monthly obligation to the Defined Benefit program is 22.94% of the gross payroll subject to the contribution rate. In December 2006

the government’s contribution was $3.8 million