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Thursday, May 23, 2024
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Senate Ponders Expanding Veterans’ Benefits

Morris Moorehead testifies at Government Operations Committee. The V.I. Government Employee Retirement System, projected to default in just over a decade, will see its $1.4 billion unfunded liability worsen slightly if a bill discussed in committee Wednesday becomes law. The Senate is considering an allowance for veterans to receive extra credited years of service without paying into the system.

Under current V.I. law, U.S. military veterans who were legal residents of the Virgin Islands before entering the military are given up to three years of credited service toward retirement for their military service, provided the employee pays an amount equal to contributions which would have been deducted from his salary during the period.

As long as they pay, the veterans can receive GERS retirement benefits as if they were also working for the V.I. government and contributing to the GERS, when they were not.

The bill, sponsored by Sen. Alicia "Chucky" Hansen, would remove the requirement that veterans pay GERS the amount that would have been deducted had they worked for the V.I. government during the time they were actually working for the U.S. government.

Government employees who are members of the system pay eight percent and employers 17.5 percent of salary for 25.5 percent of salary. According to GERS and to the U.S. Department of Interior Office of the Inspector General, GERS would need to increase that total to about 43 percent to maintain the current level of benefits and become solvent. There is no provision in the law to recoup the government’s share of contributions toward the pension, so veterans in GERS receive retirement pensions are currently partially subsidized by GERS.

And if Hansen’s bill becomes law, GERS will increase the veterans pension subsidy by the amount of those foregone eight-percent employee contributions.

Hansen spoke of the valuable, patriotic service veterans have given their country as the primary reason for exempting those veterans from paying their V.I. government pension contributions for the time they were actually working for the federal government but received time credited toward their V.I. government pension.

Morris Moorehead, director of the V.I. Veterans Affairs Office, testified in support of the bill, saying GERS used to offer veterans up to 10 years of credited service toward V.I. government retirement without paying for it. Since then, the Legislature reduced the maximum amount of credited time and eliminated the waiver of employee-contributions with the Retirement System Reform Act of 2005, he said.

Because it was offered in the past and people joined the military while it was offered, the extra retirement benefit amounts to "more than a promise" to veterans, Moorehead said.

"I believe that this retirement benefit was promised to the veterans joining the military service in the past, and should be honored by future legislatures," he said. "The cost of this benefit should be absorbed by the central government and funded to the GERS annually for all veterans retiring under the system."

No one from GERS was invited to testify at Wednesday’s hearing, according to the official agenda issued by the Government Operations Committee, but Sen. Celestino White said GERS would testify at a subsequent committee hearing March 21.

Several senators said they felt the measure was probably not feasible given the government’s budget crisis and GERS’ own financial implosion.

"I am not going to confuse what I would like with what I can have," White said. "I would like it, but the question is whether we can.”

“Is the application feasible in these times? I don’t know,” he said. “I will be in a better position to say when the GERS comes to testify."

Sen. Janette Millin-Young said she supported the concept, but she also had doubts about paying for it.
"I want to temper that (support) with the financial situation we have right now," she said.

"We can’t seem to find out exactly what the situation is, but we know it isn’t good," she said.

Sen. Terrence "Positive" Nelson also tossed some cold water on the bill.

"I would like to support this measure but if we cannot afford it, I cannot support it," Nelson said. "I would not want to give veterans false hope.”

“Unfunded mandates are something we have to be careful of," he added.

No votes were taken during the hearing. Present were Hansen, Nelson, White, Millin-Young and Sen. Usie Richards. Absent were Sens. Patrick Hill, Neville James and Alvin Williams.

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