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HomeNewsArchivesGERS NEEDS ANOTHER $300 MILLION

GERS NEEDS ANOTHER $300 MILLION

In order to meet its obligations in the near future, the Government Employees Retirement System needs a 30 percent boost in income. In dollars that totals $300 milion.
The best way to accomplish that is through higher earnings on investments, Wednesday's Daily News quotes Howard Rog, actuary of Segal Advisors Inc., a consultant firm, as saying.
The gap between projected revenues and future demands in the retirement fund has been a major concern for years, resulting in part from the government and employees not paying enough into the fund to cover future benefits.
But GERS officials have also been told that their returns on investments are substantially below average — the portfolio performed 20 percent below the industry standard last year, according to the Daily News story.
It is not uncommon for government pension funds to be underfunded. And the V.I. retirement fund is not running out of money because it has receipts coming in from public employees’ payroll deductions and from investments. But there are 11,000 employees who can choose early retirement at age 50 and GERS needs to be prepared to meet those obligations.
Rog recommended that the fund look to more profitable investments, since raising employee contributions would not be politically viable.
In a related story stemming from Tuesday's GERS board meeting, the Daily News said the project to introduce a new data system for the system's loan portfolio is far behind schedule.
Eric Bass of Grant Thornton, the consultant firm handling the loan conversion project, was quoted as saying the people working on it lack the expertise, and in some cases aren't working hard enough to get the job done.
The project was supposed to be finished by September 1999. It is needed to allow a full audit of GERS loans, which are mostly mortgages and personal loans.
GERS administrator Laurence Bryan said the agency just doesn't "have enough qualified staff to move the process along," the Daily News story said. He voiced satisfaction with the consultants' performance.
Board members Tuesday also heard a proposal from the V.I. Homeowners League that home mortgages held by GERS be reduced from 10 percent to a rate more in line with current bank rates. The group represents homeowners who hold mortgages with GERS.
GERS was previously locked by legislation into the 10 percent rate but Bryan said the fund now has the legal right to set its own rates and the issue would be dealt with soon, the Daily News reported.
Marjorie Caraballo, representing the League, also requested better communication from GERS about mortgage policies and investments.

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