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Charlotte Amalie
Thursday, March 28, 2024
HomeNewsArchivesSolvency Alarm Bells Continue to Ring at GERS

Solvency Alarm Bells Continue to Ring at GERS

With two members absent and a one-hour late start because of a lack of a quorum, the V.I. Government Employee Retirement System Board of Trustees met Thursday in what could be characterized, minus the tardiness, as a fairly standard monthly session.

One theme that emerged and appears to have sounded an alarm bell to at least one board member was the treasurer’s report and the system’s future solvency.

As it stands now, the pension system continues to disburse much, much more in annuity payments to retirees than it is currently bringing in from active member government employees and their employer, the V.I. government.

For March alone, total collections for GERS totaled $8.2 million, total disbursements netted $23.9 million, and the net cash deficit stood at $15.6 million. For the fiscal year, collections stand at $72.6 million, disbursements $147.9 million, and the net deficit at $75.2 million.

Board member Carol Callwood sounded flabbergasted following the treasurer’s report and wondered aloud whether central government received the same monthly reports the board did.

“We keep talking about how our system is going under and the ratio of retiree to active and the annuity payments versus contributions is a death pit,” Callwood said. “I keep looking at these numbers and going, ‘Oh my goodness, $19 million versus $6 million coming in? That’s … disparity.’”

Board Chairman Vincent Liger responded, “It’s a concern of all of us. I am fully sure that the government is aware of it and I’m pretty sure the senators are aware of it.”

GERS Administrator Austin Nibbs offered his input as Callwood further questioned aloud whether the government truly had a handle on the severity of the problem.

“It’s not GERS. The employer share is missing,” Nibbs said.

“We send out the bills,” he added. “We just have to wait. Some people have been retired for an entire year and are still waiting for an annuity check.”

“We can only issue annuity checks if two portions of the contributions are paid up,” Nibbs continued. “I just wanted to make sure and put that on the record.”

When it came to new business, the board approved spending $237,000 so a new generator could be purchased, in addition to fixing the current one, at the Carambola Beach Resort.

GERS has owned Carambola since May 2012 when its previous owners defaulted on a $15 million GERS loan.

Since then, GERS has operated the hotel through an appointed corporate board while working to complete renovations.

Nibbs and members of the board have testified to the V.I. Legislature on several occasions that the property should eventually sell for the loan amount or much more, once economic conditions improve, based upon the value of the land and buildings.

At a special board executive session held two weeks ago, GERS voted to sell Carambola Beach Resort and to publish an invitation for bids on the property.

That pending sale was on the mind of many members, according to retiree Mary Moorhead.

As the meeting got under way and the board heard comments and suggestions from retirees, Moorhead asked for “clarity” on why the board was deciding to sell now given the current economic climate hadn’t changed that much since GERS acquired the property.

“We’ve been getting offers since November 2012 from potential investors,” Nibbs said. “Some are good offers. The board looked at a couple and decided to send out the invitation for bid to see what we can get on the sale of Carambola. It could take years. We don’t know.”

He said GERS’ intention “was never to have a hotel in our portfolio.” He said the loan was supposed to be repaid within five years so it would have been expiring this year.

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