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HomeNewsArchivesMEETING COSTS OF EARLY-RETIREMENT BILL IS KEY

MEETING COSTS OF EARLY-RETIREMENT BILL IS KEY

Balancing the $250 million-plus unfunded liability of the Government Employees Retirement System against the potential early retirement of some 450 workers will be the key to a pending bill aimed at downsizing the government, witnesses and sponsors agreed at a hearing Monday night.
Details of the bill, submitted by Sens. Almando "Rocky" Liburd, Donald "Ducks" Cole and David Jones, and its potential consequences for GERS were aired in the Senate Goverment Operations Committee's third public hearing on the issue, held on St. Croix. The meeting was less acrimonious than the previous hearings on St. Thomas and St. John, where the three lawmakers clashed with Turnbull officials over the Senate proposal versus another version from the administration.
Instead, the focus was on the positive and negative benefits of the proposed retirement plan. The impetus of the plan is Gov. Charles Turnbull's call for a 5 percent cut of the bloated government payroll. If $15 million from the government's recent $300 million bond issue can be used to fund retirement costs, then the bill is feasible, GERS administrator Lawrence Bryan said.
On the other hand, Bryan said, fewer employees contributing to the system will mean less money for GERS to work with. Both workers and the government contribute to the system. The unfunded liability originated from previous retirement plans that didn’t have a related funding source.
"The reduction of government employees will definitely have an adverse effect on the system," Bryan said. The government’s contribution is now used to retire the unfunded liability, he said, while employee contributions go into the system. "If employees are not replaced," he said, the system will not be able to "pay down on the unfunded liability as planned." According to Bryan, that liability is "stifling our creativity" to try innovative things.
Office of Management and Budget director Ira Mills said the $15 million from the bond issue was intended to help GERS develop a plan that wouldn’t add to the system’s burden. "It’s always been the intention of the administration," he said, to "leave the GERS cost-neutral, in that it wouldn’t add to the unfunded liability."
Liburd said the $15 million could be used as leverage to earn additional revenue. "One has to look at what a $15 million investment will do right now on the market," he said.
With the intent of purging the government’s payroll of expensive long-time workers, the bill would limit to 30 years the time the government would contribute to an employee’s retirement. Sen. Adelbert "Bert" Bryan said it would also free up jobs for the territory’s young people at a lower base pay for the government.
"Nobody should be working for the government for 40 years," Sen. Bryan said. "Cut off the contribution after 30 years." Otherwise, he said, "We encourage them to stay."
Liburd, Cole and Jones vowed to "massage" the bill in order to satisfy all parties.

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Balancing the $250 million-plus unfunded liability of the Government Employees Retirement System against the potential early retirement of some 450 workers will be the key to a pending bill aimed at downsizing the government, witnesses and sponsors agreed at a hearing Monday night.
Details of the bill, submitted by Sens. Almando "Rocky" Liburd, Donald "Ducks" Cole and David Jones, and its potential consequences for GERS were aired in the Senate Goverment Operations Committee's third public hearing on the issue, held on St. Croix. The meeting was less acrimonious than the previous hearings on St. Thomas and St. John, where the three lawmakers clashed with Turnbull officials over the Senate proposal versus another version from the administration.
Instead, the focus was on the positive and negative benefits of the proposed retirement plan. The impetus of the plan is Gov. Charles Turnbull's call for a 5 percent cut of the bloated government payroll. If $15 million from the government's recent $300 million bond issue can be used to fund retirement costs, then the bill is feasible, GERS administrator Lawrence Bryan said.
On the other hand, Bryan said, fewer employees contributing to the system will mean less money for GERS to work with. Both workers and the government contribute to the system. The unfunded liability originated from previous retirement plans that didn’t have a related funding source.
"The reduction of government employees will definitely have an adverse effect on the system," Bryan said. The government’s contribution is now used to retire the unfunded liability, he said, while employee contributions go into the system. "If employees are not replaced," he said, the system will not be able to "pay down on the unfunded liability as planned." According to Bryan, that liability is "stifling our creativity" to try innovative things.
Office of Management and Budget director Ira Mills said the $15 million from the bond issue was intended to help GERS develop a plan that wouldn’t add to the system’s burden. "It’s always been the intention of the administration," he said, to "leave the GERS cost-neutral, in that it wouldn’t add to the unfunded liability."
Liburd said the $15 million could be used as leverage to earn additional revenue. "One has to look at what a $15 million investment will do right now on the market," he said.
With the intent of purging the government’s payroll of expensive long-time workers, the bill would limit to 30 years the time the government would contribute to an employee’s retirement. Sen. Adelbert "Bert" Bryan said it would also free up jobs for the territory’s young people at a lower base pay for the government.
"Nobody should be working for the government for 40 years," Sen. Bryan said. "Cut off the contribution after 30 years." Otherwise, he said, "We encourage them to stay."
Liburd, Cole and Jones vowed to "massage" the bill in order to satisfy all parties.