82.7 F
Charlotte Amalie
Thursday, June 20, 2024
HomeCommentaryOpen forumOpen forum: Reduction of Monies to the GERS Won’t Stop the Game

Open forum: Reduction of Monies to the GERS Won’t Stop the Game

St. Thomas GERS building (Source photo by Don Buchanan)
St. Thomas GERS building (Source photo by Don Buchanan)

The recent decision by the Third Circuit Court of Appeals on Friday, April 9, to reduce monies from $68 million to approximately $25 million that the Government Employees Retirement System (GERS) has claimed that the plan sponsor owes is a cause for concern. This is without doubt a matter of considerable importance to the Citizens Harmony & Reforms Movement (CHARM) that seeks the restructuring of the GERS within the next year or so and the formation of a new pension system.

According to recent articles in the Daily News and the St. Croix Avis, the Government of the Virgin Islands, the plan sponsor of the GERS, is not liable for the $43 million difference that the court says is tied to retroactive interest payments. This then begs the question: Who is liable for the interest payments?

Research shows that almost all funding obligation procedures and contracts — such as the ones that the GERS has with the Government of the Virgin Islands (the plan sponsor) — call for interest payments at some stage. If the plan sponsor falls behind again will the same argument of ‘no retrospective interest payment’ be made regarding the actuarially determined employer contributions?

According to the GERS, the actuarial employer contributions outstanding are now at $1.6 billion. Questions have been raised as well about what is said to be a $4 billion unfunded liability. It should be noted that the GERS has taken the government to court for failing to pay its share of contributions to the pension plan and that there has been little success in the courts.

These efforts have, in essence, resulted in more debt. Was the GERS so far off track that it could not see the Government of the VI being legally forced to make its contributions in a timely manner? Robert Klauser, attorney for the GERS, argued that the government had been breaching its responsibilities for ages. It should also be noted that since the government has paid its contributions to the GERS over a period of time, this in itself, is an indication that it recognizes its responsibilities.

Needless to say, the implications of the recent court ruling are grave! Be mindful that the Third Circuit Court of Appeals consists of three judges. One of the judges agreed with the original calculation accepted by District Court Judge Gomez in which the GERS says that the Government of the VI owes the pension system. This in essence means that the Third Circuit ruling was not unanimous.

Complicating the matter further, there are, we understand, more retirees than active workers under the pension plan and that proposals put forward by Governor Albert Bryan Jr. to address the insolvency issue were, for one reason or another, rejected by the Legislature.

Despite these setbacks, CHARM is committed to resolving the GERS insolvency and the movement wants to take this opportunity to reach out to the two retiree organizations in the territory, the Government Retiree United for Fairness (GRUFF) and the St. Croix Government Retirees Inc. (SGR) as well as representatives of the active workers such as the American Federation of Teachers (AFT) for their support.

It should be remembered that we are all in this together and that the insolvency of the GERS would have a very negative impact on all aspects of our lives. Chief Judge D. Brooks Smith on behalf of himself and Judge Michael Chagares wrote, “Aggregate shortfall which now stands at about three billion dollars – leaving the system on the brink of insolvency.”

Organizers of CHARM are aware that the GERS could be insolvent as early as 2024, and that there have been mishaps along the way. We recognize as well that the VI government is operating on a tight budget. CHARM knows as well that there are, at present, some un-explored strategies and plans that could be utilized to give the GERS a new life. The restructuring plans may involve financial contributions from retirees and active workers, Legislative reforms, a federal bailout, a significant infusion of cash into the GERS through sales taxes, gasoline taxes, sale of unused government properties, the institution of a 401K structure and even reparations.

CHARM recognizes that the task ahead would not be an easy one, but it is determined to press forward in ensuring the survival of the GERS. Our movement is about working in harmony for the common good!

Citizens Harmony & Reforms Movement (CHARM)

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.

UPCOMING EVENTS

UPCOMING EVENTS