I cannot help but draw the comparison with the pension plan issue of striking ICC employees and the GERS. On the Mainland, a stock market meltdown has been occurring for the past three months. Pension plans are being destroyed as the once valuable stocks selected for 401(K) plans are tumbling. Just in July alone, 1 trillion dollars "disappeared" due to falling stock values.
Not one elected official or even aspirant (gubernatorial,
senatorial, or delegate to Congress) has offered any analysis on how
these falling stocks affect us. I must inform you that whatever economic crises emerge in the Mainland, our "metropole," must affect us one way or the other. If pension funds are in crisis in the "States," pension plans will be in crisis in the Territories. The striking ICC employees are among the first workers to feel the impact of a corporate sector reaction to the pension plan crisis that is external to our territory but affects us just the same. Our local pension fund for public sector employees the Government Employees Retirement System/GERS faces a serious crisis.
Despite what many incumbent politicians state, we have pension plan problems of our own. Unfortunately, the GERS did not fully benefit from the Bull Market of the 1990s and many local politicians have been infected with the same shortsightedness, reckless spirit, and moral turpitude of corporate CEOs whom we are today condemning. A pension plan monster has emerged; it is called the Unfunded Accrued Liability of the GERS. Based on the most recent actuarial valuation as of September 30, 1999, as prepared by The Segal Company, the Unfunded Accrued Liability is $518,081,040. Three years ago! Today, it is estimated to be 800 million dollars.
The GERS has a Plan Net Assets of $1,330,089,822. In fiscal year 2001, the GERS received $70,141,363 in employer and employee contributions and paid out $90,014,483 in benefits. The net difference is a negative figure: -$19,873,120. In fiscal year 2002, the GERS had to liquidate $30,000,000 in assets to fund the annuity payroll. We have reached the critical point where benefits paid out have exceeded contributions. Our unfunded liability monster is alive!
Many of the incumbent politicians have nourished this unfunded liability monster. They pander to a minority of workers by offering extremely generous retirement packages, but they fail to adjust the contribution deficit. Some senators perceive the GERS as a big slush fund that they can use at will to fund any pet project while the lives of our senior citizens and retirees are gambled away. Worse, by creating the unfunded liability debt, our political leaders are doing the same thing that the corporate leaders of Enron, Global Crossing, and WorldCom have done; they have created an unmanageable debt that may very well overwhelm the system. Very few of our incumbent and aspiring "leaders" will approach this unfunded liability monster, and most will deny it even exists.
Any day now, a "qualified opinion" can be presented by the fund managers of the GERS. Will public sector/government employees strike similar to ICC employees? Will the voters return the same senators who have begun the destruction of the GERS back into the Legislature so they can finish the job and empty the cash pan? Perhaps, it is easier for private sector employees to pick sense from nonsense because the choices tend to be sharply drawn. But the government sector will have to eventually smell the coffee and end the GERS madness. If not, we will as our elders say, "find out how much salt butter cost ah' pound."
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