NMI Retirement Fund investment consultant Wilshire Associates has been selected by Government of Guam Retirement Fund.
Maggie Ralbovsky, managing director, Wilshire Associates, confirmed to the Variety on Friday that Guam decided in their favor last month.
“We responded to their RFP issued last November, and Wilshire was selected as a finalist and we presented to them in February. They notified us that we won the final selection in April,” said Ralbovky.
GovGuam Fund has been in existence since 1951 and administers three plans: defined benefit plan, defined contribution retirement system and deferred compensation plan or “457 Plan.”
There are 3,594 active, 7,082 retired, and 6,466 inactive and terminated members for the DB Plan while the DC plan has 7,471 active and 278 retired members for FY 2010.
Based on the recent actuarial valuation by Milliman Inc., GovGuam Retirement Fund’s DB Plan has $1.18 billion in total investments as of Sept. 30, 2010: $684 million, common stocks; $114 million, mutual funds; $168.5 million, U.S. government securities; $5 million, non-U.S. fixed income; $187.8 million, corporate bonds and notes; and $21 million, money market funds.
The GovGuam pension agency’s total assets reached $1.292 billion as of Sept. 30, 2010, a $83 million increase from its 2009 assets amounting to $1.209 billion.
The actuarial report stated that the unfunded liability had grown from $552 million in FY 1995 to $1.44 billion in FY 2009.
The Guam pension agency has to rely on a combination of increased employer contributions and rates of return to reduce this unfunded liability.
The employer contributions increased from 22.94 percent in 2007 to 26.04 percent in 2010 while employee contributions remained at 9.5 percent of the base pay.
Guam Fund’s security ratio increased from 44.5 percent to 47.3 percent, which meant that there was a slight improvement in the Guam Fund’s ability to meet future benefit obligations.
These are the challenges that Wilshire Associates will face as it assumes its role as investment consultant.
“We look forward to starting the relationship,” Ralbovsky said.
