Though some government employees are feeling better about the stability of the local pension system and its ability not to fail should they stay vested, others still remain skeptical, Government Employees’ Retirement System Administrator Austin Nibbs told his Board of Trustees Thursday.
During a meeting on St. Thomas, Nibbs explained he has been able to assuage many of the concerns that continue to be brought to him, but skeptics remain, with some saying they would quit their government jobs and get reimbursed whatever money they contributed to the system before seeking government employment again.
While a government employee with less than 10 years of service can pull out what they’ve contributed, those in for a decade or more become vested and can only get their annuities when they retire. Getting vested in the system is beneficial as long as the employee lives several years in retirement and the system does not go broke.
If an employee opts out before reaching the 10 years, they only get what they put in the system. The government continues to match their contributions, but the employee won’t get that. The employee returning would be returning as a new employee as far as the System is concerned unless they repay what they took out. If the employee does repay, there are penalties and fees.
Thursday, GERS Trustee Andre Dorsey questioned Nibbs about the costs of these employees quitting and returning. In his report, Nibbs listed 213 cases between Oct. 1, 2022 and Feb. 28, 2023 that received refunds totaling just under $4 million. Dorsey questioned if the board should have a policy that penalized employees exiting and reentering the system.
In a previous meeting, it was stated that government agencies also contributed to an employee’s retirement fund. Legally, that is supposed to happen, but it doesn’t always. Nibbs reported that the Water and Power Authority owes, as of the end of February, a total $10.7 million. Of that total, $10.5 million alone is the employer contribution. Roy L. Schneider Hospital and Medical Center is also behind in its contributions to GERS. Its total owed to the System is $1.1 million. The employer contribution missing is $721,371.85.
Trustee Ronald Russell said the Development Committee was considering whether the Board’s moratorium on the alternative investment program should be lifted.
The board in 2014 voted to put a moratorium on the alternative investment program as many in the public perceived that loans in the program (one went to Seaborne, another to Carambola, and another to a St. Thomas grocery store that went bankrupt) were bad investments.
Russell said the consideration was focused on undeveloped real estate GERS owned. On St. Thomas, it owns 120 acres in Estates Hoffman and Nullyberg and on St. Croix 170 acres in Estate Coakley Bay. Russell said committee members were interested in seeing whether something could be done to the properties to bring economic benefit to GERS.
Trustee Nellon Bowry said he was not against lifting the moratorium for specifically those properties, but before the board does anything research should be done to determine on what would be the best use of those properties.
Dorsey had requested a review of the moratorium status be placed on the agenda at a meeting last summer. It failed to get majority support.
Nibbs reported as of Feb.28 there were 8,988 active employees in the System: 6,341 in the central government and 2,647 in the semi-autonomous agencies.
He also reported the annual benefits statements will be mailed to all active employees who were members of the GERS at the end of last year.