Guam Defined-Benefit Pension Plan and Trust Agreement

• Category: Trusts - Business
• State: Multi-State
• Control #: US-1073BG
• Format: Word; Rich Text

Description

A defined benefit pension plan is a type of pension plan in which an employer or sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provided defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay. A defined benefit plan is "defined" in the sense that the benefit formula is defined and known in advance. Conversely, for a "defined contribution retirement saving plan", the formula for computing the employer's and employee's contributions is defined and known in advance, but the benefit to be paid out is not known in advance. Guam Defined-Benefit Pension Plan and Trust Agreement is a comprehensive retirement benefit program established for the employees of the government of Guam. This plan offers a guaranteed, predetermined payment to eligible employees upon retirement, which is calculated based on a formula considering factors such as years of service, salary history, and age. This pension plan aims to provide financial security and stability to government employees who dedicate their careers to serving the people of Guam. It offers a defined benefit structure, ensuring a specific monthly amount to retirees that is not subject to market fluctuations. Under the Guam Defined-Benefit Pension Plan and Trust Agreement, there are various types or tiers of plans available, each accommodating different categories of employees: 1. Tier I: The Tier I plan is applicable to government employees who joined the service before October 1, 1995. This group enjoys more lucrative benefits, including a higher percentage of salary replacement upon retirement. 2. Tier II: Employees who joined the government service after October 1, 1995, but before October 1, 1998, fall under the Tier II plan. This plan offers reduced benefits compared to Tier I and introduces some changes to the calculation formula. 3. Tier III: Government employees hired on or after October 1, 1998, are classified under the Tier III plan. This plan incorporates further revisions in the calculation formula, including increased employee contributions, higher retirement ages, and reduced benefit factors. The Guam Defined-Benefit Pension Plan and Trust Agreement is managed by the Government of Guam Retirement Fund (GG RF), an independent entity entrusted to administer the pension benefits for eligible employees. The GG RF is responsible for ensuring appropriate funding, investment management, and distribution of benefits based on the provisions defined in the plan. This pension plan promotes long-term financial stability for government employees, encouraging them to commit to their careers while providing a reliable retirement income. Its sustained operation relies on effective management, actuarial analysis, and consistent funding to guarantee the pension commitments to employees.

Guam Defined-Benefit Pension Plan and Trust Agreement is a comprehensive retirement benefit program established for the employees of the government of Guam. This plan offers a guaranteed, predetermined payment to eligible employees upon retirement, which is calculated based on a formula considering factors such as years of service, salary history, and age. This pension plan aims to provide financial security and stability to government employees who dedicate their careers to serving the people of Guam. It offers a defined benefit structure, ensuring a specific monthly amount to retirees that is not subject to market fluctuations. Under the Guam Defined-Benefit Pension Plan and Trust Agreement, there are various types or tiers of plans available, each accommodating different categories of employees: 1. Tier I: The Tier I plan is applicable to government employees who joined the service before October 1, 1995. This group enjoys more lucrative benefits, including a higher percentage of salary replacement upon retirement. 2. Tier II: Employees who joined the government service after October 1, 1995, but before October 1, 1998, fall under the Tier II plan. This plan offers reduced benefits compared to Tier I and introduces some changes to the calculation formula. 3. Tier III: Government employees hired on or after October 1, 1998, are classified under the Tier III plan. This plan incorporates further revisions in the calculation formula, including increased employee contributions, higher retirement ages, and reduced benefit factors. The Guam Defined-Benefit Pension Plan and Trust Agreement is managed by the Government of Guam Retirement Fund (GG RF), an independent entity entrusted to administer the pension benefits for eligible employees. The GG RF is responsible for ensuring appropriate funding, investment management, and distribution of benefits based on the provisions defined in the plan. This pension plan promotes long-term financial stability for government employees, encouraging them to commit to their careers while providing a reliable retirement income. Its sustained operation relies on effective management, actuarial analysis, and consistent funding to guarantee the pension commitments to employees.