Senate to consider GERS refund for retirees who received retro pay
Published: February 24, 2014
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ST. THOMAS - A petition to call the Senate into session Tuesday has been submitted to Senate President Shawn-Michael Malone.
Sen. Alicia Hansen gathered nine signatures from senators to call the session with the purpose to consider a bill to repay the 8 percent employee retirement contribution withheld from the 2010 retro payments.
The amount of money withheld from government retirees' retroactive payments, as an employee contribution to the territory's pension system, is about $1.5 million, according to Government Employees' Retirement System Administrator Austin Nibbs.
He said the total contributions withheld from all the retro checks issued in 2010, for both active and retired employees, was $7.1 million.
The group Government Retirees United for Fairness, formed in October, has hired attorney Joseph Arellano to represent them.
Last month, Arellano sent a demand letter to Nibbs, the GERS board and V.I. Finance Commissioner Angel Dawson Jr. seeking answers to questions about the retro payments made to some retirees in 2010.
Between 1989 and 2002, the government negotiated salary increases that never were honored for some collective bargaining units. In 2007, legislation established the Retroactive Wage Commission to determine exactly who was owed how much.
After three years of reviewing more than 1 million documents, the commission determined 10,718 past and present government employees were owed $219 million in retro pay.
The Retroactive Wage Commission had a set amount of money to use to pay the retro - $45 million from the Insurance Guaranty Fund - so they developed a formula that would give each individual 16.7 percent of the total amount owed to them.
When the retro money payments were made to the government's retirees, the checks were disbursed by the V.I. Finance Department, which withheld Medicare, Social Security and 8 percent for the employee's contribution to GERS.
Chief among the retiree group's complaints is that the 8 percent employee contribution should not have been taken from the retro checks paid to retirees in 2010.
In response, Nibbs agreed with the retirees but said the law restricts him from repaying the money that was withheld.
"It is high time for these retirees to receive this money," Hansen said. "The 8 percent contributions should have never been withheld. Now that the GERS agrees with that, but argues that language in the V.I. Code needs to be changed to allow for it, we need to act quickly to make that change."
The senators who signed the petition to hold the session are: Donald Cole, Judi Buckley, Kenneth Gittens, Hansen, Myron Jackson, Clarence Payne, Tregenza Roach, Sammuel Sanes and Janette Millin Young.
The petition, which only requires a majority of eight senators, calls the Senate into session at 3 p.m. Tuesday.
Senate President Shawn-Michael Malone did not return calls to confirm the session.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.