In major good news for the rapidly declining Government Employee Retirement System, the V.I. government has made the first $7 million payment of federal rum excise tax revenues mandated under a 2011 law.
GERS has been liquidating its pension fund to make current payments for more than a decade. It liquidates between $70 and $128 million per year and is projected to completely exhaust its trust fund in less than 10 years. (See: GERS Collapse Will Come, Retirees Better Start Planning in Related Links below)
To try to address the impending collapse, in 2011 the Legislature passed a measure appropriating $7 million per year for GERS out of the federal excise taxes remitted to the territory. The balance that is due through Sep. 30, 2016, is $21 million. The money was diverted in previous years due to serious budget issues. On May 31, GERS received the first $7 million, according to the retirement system.
"This has been a long time coming and, on behalf of the GERS, I would like to thank former senators (Carlton) Dowe, (Celestino) White and (Ronald) Russell for their leadership in moving this measure to the floor in the 29th Legislature, in an effort to reduce the unfunded liability," GERS Administrator Austin Nibbs said in a statement Wednesday.
Nibbs also thanked the current Legislature for appropriating the amount and Gov. Kenneth Mapp’s administration for releasing the funds. If the payments continue, they will reduce the rate the GERS trust fund is liquidated by roughly 10 percent – a significant improvement, although not enough, by itself, to dramatically change the fund’s situation.