74.7 F
Charlotte Amalie
Friday, March 29, 2024
HomeNewsArchivesThe Pension Reform Controversy Continues

The Pension Reform Controversy Continues

Dear Source:
As reported in the local media, members of the Steering Committee for the Advocates for the Preservation of the Retirement System (APRS) recently met with Governor John deJongh, Jr. to discuss the pension reform bill he submitted to the Legislature in March. We share the Governor’s sense of urgency that reforms to the Government Employees Retirement System be taken swiftly. They are long overdue and continued inaction will only further compound the System’s problems and increase the unfunded liability. GERS, too, has been calling for legislative action. However, as we discussed with the Governor, there are many provisions of this bill that we do not support.
The bill, recently submitted, appears to be a combination of Bill No. 29-0099 which was submitted to the 29th Legislature by GERS, and of the Pension Reform Task Force’s Report. The solution to the problems of the System must be fair and equitable to all stakeholders. We do not believe that this bill presents fair and equitable solutions. Solutions cannot be at the expense of one group, nor should changes to the System pit one group against another. All members of the community have an interest in preserving the Retirement System and in protecting its assets.
Throughout the last decade, the administrators of GERS have been warning the public of the possible bankruptcy of the System. For the most part, these warnings have fallen on deaf ears. Every elected official serving during this time period has also known of the System’s problems, yet neither GERS nor our elected leaders have taken the necessary steps to place the System on a sound financial footing. Act 6794, the Retirement Reform Act, of 2005, authorized the GERS Board to increase both employees’ and the Government’s contribution rates. The GERS Board of Trustees has failed to utilize this power.
When Bill No. 29-0099 was presented, we expressed our concerns and stated our objections to various provisions. It was, and continues to be, our belief that many of the provisions it contained, and that are contained in this new bill, could further jeopardize an already bad situation. This bill proposes to increase the amount of risk that the System takes with regard to its investments by allowing the purchase of more speculative investments and increasing the amount of funds that can be invested in riskier investments. It appears to us to be a desperate gamble that the System can ill afford and we feel that lowering the grade of investments from BBB to B is contrary to the spirit of the “prudent investor rule”. We were, and still are, concerned that too many of our assets have been placed in alternative investments and senior life settlements (viaticals). We repeat our call for a moratorium on alternative investments. We believe that allowing additional funds to be placed at risk is unwise.
As this bill works its way through the legislative process, we will continue to elaborate on our concerns. While we cannot support this bill, we must work together to find a solution, for we cannot afford inaction or ill-conceived actions that will lead to the failure of the Government Employees Retirement System. Sincerely,
Leonard Smollett, Chairperson of the Steering Committee,
Advocates for the Preservation of the Retirement System (APRS)

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.