A bill to pay outstanding annuities owed to retirees led senators and testifiers to discuss how the government is going to tackle its longstanding retroactive wage debts, for which many demanded repayment as soon as possible.
The proposed bill appropriates $4 million per year for the next 10 years, for a total of $40 million, to the Government Employees’ Retirement System (GERS) to cover contributions that have yet to be paid for negotiated salary increases that testifiers said they never received.
Government retirees testifying during Monday’s Appropriations and Budget Committee hearing were adamant about getting the money that’s owed to them. Many said they are eligible for an increase in benefits but continue to receive payments based on an incorrect Notice of Personnel Action (NOPA), which now needs to be adjusted.
"As long as this bill is put off, the retroactivity will continue to bleed," said Carmen Gomez Clendinen, a local retiree who flew over from St. Croix to speak at Monday’s hearing. Clendinen said she has continued to talk to government officials about the problems with her benefits to no avail, and on Monday said she just wants the money for which she worked three decades.
According to senators, this problem has been a sore spot for years, and with many retirees on fixed incomes feeling the pinch of rising living costs, it’s time to finally make a dent in the payments. The bill would cover the government’s portion of contributions that remain unpaid to approximately 4,000 employees.
GERS officials said they weren’t opposed to the bill, but stressed the importance of conducting an actuarial study to determine exactly how many retirees have the same issue and are owed money before any payments are made. Such a study, said GERS Administrator Austin Nibbs, may take as long as 12 months since recalculations have to be made and each NOPA will have to be inputted manually.
Nibbs requested an extra $500,000 to cover administrative costs associated with the project, which he said possibly includes hiring additional staff. Meanwhile, he added that it is unclear in the bill who is responsible for covering the employees’ share of the contributions, which also has to be taken care of in order to avoid the very situation GERS is facing now — the failure to bring in as much in contributions as it is paying out in benefits.
An amendment tacked onto the bill during the hearing makes provisions for an analysis — verifying what wages are owed and the time served by the employee — to be completed before the Office of Management and Budget (OMB) makes a payment.
The first payment, according to the bill, is meant to be taken from the General Fund in fiscal year 2011, which OMB head Debra Gottlieb said in a written statement, is really not possible at this time, given the current state of the government’s finances. While many senators said these payments need to remain a priority, others cautioned that the Legislature also needs to continue to make sure there’s enough money to cover them.
The bill as amended cleared the committee and was forwarded onto the Rules and Judiciary Committee for further amendments and approval. Senators also approved a lease agreement between the government and O’Connor Rentals Inc. for land in Cruz Bay, St. John, that’s used for a car/jeep rental business.
Present during Monday’s hearing were Sens. Craig W. Barshinger, Sens. Carlton "Ital" Dowe, Louis P. Hill, Wayne James, Terrence "Positive" Nelson, Patrick Simeon Sprauve and Sammuel Sanes.
