The Government of Guam Retirement Fund received a clean opinion from independent auditors who found no material weaknesses or significant deficiencies in the fund's fiscal 2025 finances.

It's the 20th consecutive year that the fund received an unmodified opinion on internal control and compliance, according to the Office of Public Accountability, which highlighted that the audit by Burger & Comer P.C. shows the fund closed fiscal 2025 with an increase of $278.3 million in net position.

“From $2.9 billion (B) in FY 2024 to $3.1B in FY 2025,” the OPA said.

The increase in net position resulted from an increase of $216 million in the Defined Benefit Plan net position and $62.3 million in the Defined Contribution Plan net position.

“The DB Plan’s FY 2025 net position of $2.6B increased by $216M from its FY 2024 net position of $2.4B. The increase was primarily due to a $215.7M rise in total assets, driven largely by market fluctuations in total investments,” the OPA said.

Fund growth during fiscal 2025 was slower than in fiscal 2024, according to the OPA. In FY 2025, net appreciation in the fair value of investments was $222.1 million. In FY 2024, it was $419.5 million.

“This was largely due to market fluctuations, which resulted in an 11.31% return on the investment portfolio in 2025. In FY 2025, employer contributions increased by $15.5M, and member contributions decreased by $1.0 million,” the OPA said.

The audit shows that employers paid in more because FY 2025 reflects 12 months of DB 1.75 contributions, compared with FY 2024.

The audit also shows that deductions from the DB Plan increased by $3.7 million, according to the OPA.

“This included a $6.1M increase in benefit payments related to age and service annuities ($5M), survivor annuities ($1.4M), and a decrease in disability annuities ($312K). The $6.1M was offset by a $764K decrease in refunds and interest on refunds and a $1.9M bad debts expense recorded in 2024. The GGRF recorded a $1.9M allowance for receivables, primarily from the Government of Guam General Fund, in FY 2024; these receivables have been outstanding for years and appear uncollectible,” the OPA said.

The fund wrote off $1.9 million in FY 2025, according to the audit, which said DB Plan membership decreased by 257 due to an increase in retirees.

Market fluctuations also contributed to depreciation in investments.

“The DC Plan’s FY 2025 net position of $515M was a $62.3M increase compared with FY 2024’s net position of $452.7M. Net appreciation (increase) in the fair value of investments for FY 2025 was $36.3M, compared with $80.3M in FY 2024, a decrease of $43.9M,” the OPA said.

According to the OPA, deductions from the DC Plan increased by $1.8 million, largely due to an increase in refunds to separated employees and withdrawals of $2.7 million, offset by a $924,000 decrease in administrative expenses.

“Total active DC membership increased by 323 from 15,449 in FY 2024 to 15,772 in FY 2025,” the OPA said.

The OPA said the fund's total receivables and liabilities decreased by $3.2 million and $1.7 million, respectively.

“Decreases are due largely to the receipt of member and employer contributions prior to Sept. 30, 2025. The DC Plan’s total receivables of $316K in FY 2025 decreased by $573K from $890K in FY 2024,” the OPA said.

The OPA reported that DB Plan total liabilities of $22.2 million decreased by $1.9 million from $24.1 million in FY 2024.

“DC Plan total liabilities slightly increased by $145K, from $1.7M in FY 2024 to $1.8M in FY 2025,” the OPA said.

Independent auditors did note a “critical” issue: the impact of market volatility on the DB Plan's unfunded liability.

“The unfunded liability is the present value of future benefits payable that are not covered by the actuarial value of assets as of the valuation date. The unfunded liability increased from $1.21 billion (based on the 2023 actuarial valuation) to $1.34 billion (based on the 2024 actuarial valuation), and the actuarially determined contribution rate increased from 30.77% to 33.85%. The primary reason for the increase in the contribution rate was due to the net recognition of investment gains and losses over the last three years,” the OPA said.

The audit noted “negative” returns from 2000 to 2025.

“GGRF investment returns averaged 7.23% from 2000 through 2025,” the audit said.

Discussion of critical issues also highlighted that the unfunded liability is to be fully funded within 80 years from May 1, 1951, a period extended by two years through Public Law 33-186.

“Based on the 2024 valuation, there are 8.58 years remaining in the funding period. Management continues to recommend that the Guam Legislature fully fund the actuarially determined contribution rate each year. The uncertainties in the investment markets, and the years remaining in the funding period underscores the need for the Guam Legislature to continue to provide full funding each year,” the audit said.