Legislators meet today to discuss government pension system reforms
Published: May 13, 2014
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ST. THOMAS - The territory's legislators will meet at 10 a.m. today to begin the discussion on reforms to the government's pension system.
A rally for retirees, concerned about some of the recommendations made by a task force last year, will take place at 10 a.m. today in Emancipation Garden.
Following the rally, retirees will walk over to the Ottley Legislative Hall and sit in the gallery while senators consider measures that could have a serious impact on them.
At a session Monday, Senate President Shawn-Michael Malone said the hearing planned for 6 p.m. Wednesday on St. Croix has been postponed. He said these hearings are just the beginning of a long process to reform the Government Employees' Retirement System.
"There will be a few more hearings on the reform proposals to the pension system for the Virgin Islands," Malone said.
The reform measures to be considered today come from the Pension Reform Task Force.
In May 2012, Gov. John deJongh Jr. signed an executive order to establish the task force, which was a recommendation from an Inspector General audit report of GERS.
The task force began meeting in the fall of 2012 and submitted the final report to the governor on April 29, 2013.
The recommendations were submitted to the Senate in May 2013.
In March, deJongh submitted a proposed bill to Malone that incorporates the task force recommendations.
The task force's goal was to find solutions to keep the pension system solvent.
The system's unfunded liability - the difference between what is being paid into the system in contributions and the obligation to pay out all retirement benefits - currently stands at about $1.8 billion.
During the last two decades, the unfunded liability has grown because of insufficient contributions, a ratio of fewer active employees to retired employees and unfunded legislative mandates, such as early retirement packages.
The proposed legislation is projected to halt the declining percentage of the GERS liability by 2018, and reverse the trend by 2024, according to Government House.
The task force recommendations include:
- Asking employers and employees to contribute a larger amount toward pension benefits.
- Raising contribution rates for senators and judges.
- Reducing retirees' current benefits by 10 percent.
- Increasing the early retirement age from 50 to 55 and the regular retirement age from 60 to 65.
- Limiting the annual cost of living increase.
- Changing the formula used to calculate benefits.
- Contact reporter Aldeth Lewin at 714-9111 or email firstname.lastname@example.org.