Dear Source:
Our Legislature is comprised of a diverse group of people. In it there is an accountant, a lawyer, a fireman, educators, a few government workers, military personnel, law enforcement, a health administrator, those who cut their teeth though political families and other political endeavors, some have degrees in various fields, some don't.
The point I am trying to make is I don't believe that the senators themselves cooked up, in some back room, the provisions that changed the pension plans and contributions set out in Act 6905. In fact, in looking back at published reports from our daily newspapers this is supported when one looks at statements from GERS Administrator Willis C. Todmann.
At a senate hearing in July, Todmann spoke about the GERS debt, which he said has been mounting since 1987. It was at that meeting the community (those who cared to listen) first learned that the GERS was working on changes to the GERS Reform Bill and, when it was finished, would send the recommendations to the Governor so he could send it to the Senate for action.
Todmann told the committee that our local contribution rates were not enough to maintain the benefit structure and basically, GERS is paying out more in benefits than it is collecting in contributions. He said the system would not survive without an increase in contributions from present employees. Yes, the proposal to increase contributions was a GERS initiative, not a senatorial initiative.
Most Americans are aware of the problems existing in the Social Security program. It has been said for years that the system would collapse because the contributions presently being paid into the system would not be able to support future beneficiaries even though they too have been contributing to the system for many years. That is what is called unfunded liability. That is the monster we in the Virgin Islands are presently grappling with.
Todmann said more than that. He said the GERS wanted to infuse the system with $600 million through a pension obligation bond. Yes, the proposal to float a $600 million bond was a GERS initiative, not a senatorial initiative.
In fact, a local printed newspaper in January ran a story headlined "GERS officials express surprise, uncertainty at deJongh's stance against issuing bonds." The story was written just after the Governor made his State of the Territory address and said he opposed floating the bonds. In response Todmann said he hopes the Governor has an alternate plan because the unfunded liability is "too critical to ignore."
Also in the story it was said the former senate president asked Governor Turnbull's financial team and the GERS to come up with a plan to address the unfunded liability and they returned to the senate in December with a request to float the pension obligation bonds. That is more evidence that the provisions in the bill were not concocted by the senators.
Whether the public agreed with the plan or not, it seems to me that the experts at GERS (unlike the diverse group of senators, GERS members are all financial experts) were confident that the entire submission, including the bonds and the increase to the contributions, was the right thing to do to save the GERS and guarantee a pension to future retirees.
What I am saying is that our senators have to rely on the expertise of others and the opinions of experts in the field to guide them in making laws to ensure the solvency of this Territory. The GERS spent a lot of time coming up with these proposals. From months before July until the bill was considered by the senate in December the GERS was "perfecting" the legislation to suit the needs it has to get a grip on the unfunded liability.
The average John Q. Public does not have the time or inclination to obtain first hand information on this and many other pertinent issues affecting our Territory. Most people do not constantly listen to radio news reports every day or read long and oftentimes boring newspaper reports. The general public largely relies on talk shows and street corner talk where they hear second hand information from people who also got the information second hand. By the time the information circulates through the public the real information is lost. All that is left is to blame the senators for floating bonds, increasing contributions and changing retirement plans.
So, though the vote may have been largely unpopular, it seemed to have been based on extensive research over more than a year by the best financial experts the territory has to offer – persons represented by the Governor's financial team and the GERS. And although the senators knew passing the bill would be unpopular, they believed they had enough credible information suggesting if they did not approve it, the GERS system would crumble.
Victoria Williams
Frederiksted, St. Croix
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