The dispute at the Committee on Finance Friday was not about adding $3 million to a specified contribution to Government Employees’ Retirement System. It was about what to call the money.
GERS Administrator Austin Nibbs was for both parts of the legislation sponsored by Sen. Donna Frett-Gregory, which would increase the amount remitted annually to the GERS from $7 million to $10 million and calling the funds a direct contribution to the GERS instead of being designated towards outstanding employer contributions. Nibbs said the change in designation of the funds would allow him to invest it.
Sen. Kurt Vialet, who sponsored the legislation Frett-Gregory was proposing to amend, was against the change in designation. He was concerned funds would not be there for retirees who retired and then found that the employer (the central government) had not made its contribution.
A compromise may be on the way.
At the end of the hearing committee chairwoman Frett-Gregory said both sides had been heard and indicated a compromise was probably the solution. The act will be held in committee for further consideration. During the hearing Vialet suggested a compromise of 50 per cent of the funds being designated a direct contribution and 50 per cent being designated for missing employer contributions.
His concern arises from times when employees retire and find that thousands of dollars are missing in employer contributions to their retirement account. GERS refuses to initiate annuities until an employee’s account is paid in full. The government would claim it had no funds to pay the missing contributions and the retiree could go a year or more without receiving a check. Vialet’s bill addressed the problem by appropriating funds to be set aside to be applied to any retirees missing employer’s contributions.
The missing employer contributions often occur when an employee is first hired. The employer’s contribution is not always initiated on a timely basis.
Jenifer O’Neal, director nominee of the Office of Management and Budget, testified against the amendments but said she had good news for retirees. She said the OMB released $21 million to GERS on Feb. 14 for years 2013, 2014, and 2019 and, on March 5, OMB released an additional $1.8 million for the outstanding balance owed for 2017.
She said that raising the amount to $10 million would put an added strain on the General Fund. She also objected to the change in designation because, “While OMB understands the need for funding of some of these unfunded mandates, we are also cognizant of the need to reduce the outstanding employer contributions and not compound the outstanding sum with further charges for delinquency fees and lost investment penalties.”
Currently, the outstanding employer contribution to GERS is $72 million – $67 million is owed for member’s benefits, $4 million is assumed for lost investment, and $1 million is owed in delinquency fees.
Helen Hart, representing Government Retirees United For Fairness, said the organization supported the measure, but added, “GRUFF continues to recommend that for the survival of GERS the unfunded liability issue needs to be address and needs to be address sooner than later.”
Frett-Gregory stated several times that her measure was just the start in the legislature’s efforts to resolve the financial problems at GERS.
“It is time we realize, if GERS goes south, we all go south,” Frett-Gregory said.
GERS has 8,597 retirees on its rolls. Its biweekly pay out is over $10 million.
From what I can gather from previous discussions about GERS contributions, is that employees are being paid retirement funds for which adequate contributions were not made by either the employee or the employer, not to mention intelligent investment of those contributions. I’m no math whiz, but there is no mystery as to why there are inadequate funds. There simply wasn’t enough money contributed by either party, or for long enough, to provide the amounts retired employees expect to receive. The public retirement system is a millstone around the necks of many cities and towns all over. Newer employees should be converted to individual 401K accounts or other similar products, even self-directed and portable. Retired employees should be paid out what they and the employer contributed, plus maybe 10-20% more due to terrible investment practices by GERS. Sell all GERS investments, even the administrative buildings, and be done with it.
Any comments on the pension after 10plus yearsthe min. should be 600.00 to 800.00or more? Afterworking for the government.Any information ?
The system was set up to fail from the beginning. If you are 60 years old and you worked 10 years in government, you can retire with 80% of your pay for life. If start work at age 20 and you work 20 years as a cop or a fireman , you get 80% of your pay for life. Senators and judges retain their 100 percent of their pay for life..
If GRS goes down , Hurricanes Irma and Maria will seem like a walk in the park. Making hard decisions about GRS is not for politicians with personal interest. No one is willing to make the hard decisions needed because that would make them unpopular and hated. This tier idea that the governor is proposing is prosperous. It is going to create a large exodus of government employees retiring and the collapse of the central government. Everyone I know , young and old , in government, are willing to cut their loses and retire . If the governor’s plan is implemented employees in Education, health, wapa, etc. are going to leave. These departments are already feeling the strain of employees leaving with no replacement in sight. The Government of the VI is gambling with peoples lives and instead of someone making some hard decisions, they opt to put on this make-believe magic show to fool the people into thinking that money will appear from somewhere and save GRS. Well I don’t believe in fairy tales, and these elected politicians need to start doing something soon to address this problem or they will be joining the rest of the “well wishers “at the GRS water well and find that it has run dry.!Time to dig another well, Governor! Senators! GRS!