The Young Democrats of St. Croix (YDSTX) issued a statement on Tuesday emphatically supporting Bill No 32-0102, which repeals Act No. 6110, section 10, and Act 6463, Section 25 and provides that if a retiree remains in government service for 30 days, then the retiree must begin to recontribute to the Government Employees Retirement System of the Virgin Islands (GERS).
The GERS pension plan — which covers retirement benefits for nearly 20,000 combined, active and retired fire fighters, teachers, police officers and other government employees in the territory — is underfunded by $3.17 billion and will continue to balloon over the next decade. This staggering sum was reported by Austin Nibbs, the CEO and administrator of the pension system (GERS), who, on Friday, July 21, testified before the Virgin Islands Senate Finance Committee that in addition to the pension liability, the Government of the Virgin Islands (GVI), based on assumptions of their actuary, owes the system “1.5 billion dollars in missing employer contributions.”
“The single greatest problem facing the territory in the foreseeable future is the GERS Pension System’s inevitable collapse forecasted within the next five years,” YDSTX President Troy Williams said.
Over the past 20 years, the system has faced liquidity issues for numerous reasons to include: legislation that allows retirees to return to work, continue to collect an annuity and receive a salary, while no longer contributing to the pension plan, which is severely counterproductive. This legislation allows for GVI and former retired personnel to avoid paying the retirement system the employee/employer contributions it needs to payout retiree benefits.
YDSTX urges the 32nd Legislature to pass this measure and urges Gov. Kenneth Mapp to sign it into law. The administration must also take steps to expand its recruitment tools by training and retaining younger workers instead of hiring retired personnel to fill vacancies. Although situations may require an individual’s expertise to fulfill an agencies mandate, a new policy model must be created within the Department of Personnel to recruit college graduates in the areas of education, health and technological services.
YDSTX believes in the future, and the V.I. will increasingly need to rely on younger workers to build and maintain the skilled workforce it needs if the path to economic sustainability is indeed attainable. Supporting younger workers specifically in the public sector strengthens GERS by offsetting its current 1:1 ratio of active employees versus retirees.
“We believe this is an issue in which all Virgin Islanders should share concern. With a weak economy and currently no access to the bond markets, the possibility of GERS receiving an infusion of 1.5 billion from this government is slim. Moreover, to make up the difference in unpaid employer contributions—in other words more taxes—the burden will ultimately fall on taxpayers,” Williams said.
“The government needs to move forward with a new mandate to invest in a younger qualified workforce and end the practice of recycling workers, but rather prepare and effective 21st century workforce.