Defined Contribution Plan
If you were hired by Government of Guam beginning October 1, 1995, you are required to participate.
Voluntary participation is also granted to any member with less than twenty (20) years service credit, recognized under the existing retirement system. The deadline for voluntary transfers is December 31, 1999.
The Plan does not allow participation by employees who are:
- Employees in the Defined Benefit Plan.
- Persons whose services are compensated on a fee basis.
- Independent contractors.
- Persons whose employment is for a specific project.
- Persons who are employed in the Senior Citizens Community Employment Program.
Contribution Rates
Through payroll deduction, you can make pre-tax contributions to your 401 (a) plan from 5% of your eligible pay. Contributions are automatically deducted from payroll checks. Government of Guam makes a nondiscretionary contribution in an amount equal to 5% of your eligible compensation. These contributions benefit all participating employees.
Vesting
Vesting refers to the percentage of employer contributions a participant is entitled to receive upon distribution from the Plan. Your contributions are always 100% vested (including any rollover/transfer contributions you are allowed to make to the Plan), plus any earnings they generate. Employer contributions to the Plan, plus any earnings they generate, are vested as follows:
Years of Service Vesting Percentage
- 5 or less, 0%
- 5 or more, 100%
Investment Options
For your 401 (a) plan, you can direct your money into one or more of a variety of investment options managed by some of the most reputable and recognized names in the industry. These choices include variable investment options. The variable options provide variable returns, which do not guarantee principal and are not guaranteed as to a fixed dollar amount. The rate of return you receive on a variable option may increase or decrease depending upon the performance of the underlying investments in the portfolio.
The maximum annual leave lump sum pay out is 320 hours. For members of the Defined Benefit Plan, unused sick leave is converted into service credit. For members of the Defined Contribution Plan, lump payment is made upon retirement for half of the members’ unused sick leave.
For more information regarding your retirement plan, you may visit http://www.ggrf.com
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