The Government Employees Retirement Systems board has agreed to lend $13 million to the V.I. government for incentives encouraging early retirement, according to a statement Sunday night from Government House.
“I appreciate the board of GERS recognizing that paying these incentives is in the long run of great benefit to the territory’s financial health, and for working with my administration to make sure we can implement this important provision of the legislation enacted to balance the budget and avoid a fiscal crisis,” Gov. John deJongh Jr. said in the statement.
The GERS board also voted to rescind the standard 8 percent interest rate on its loan in favor of a lower one. The loan will be repaid with funds collected from delinquent property tax collections.
Under the Economic Stability Act, passed into law earlier this year, the government encouraged older workers to retire by paying a one-time benefit. The purpose of the bill is to reduce the government payroll and save millions of dollars in the long term, according to the statement. The act offered eligible employees with 30 or more years of government service a $10,000 payment if they chose to retire.
The payments are expected to cost about $3.7 million, with the remainder of the GERS loan making lump sum payments for leave time accrued by the retiring employees, according to Government House.