81.7 F
Charlotte Amalie
Friday, October 7, 2022
HomeNewsArchivesGERS Officials Predict Ruins Instead of Retirement

GERS Officials Predict Ruins Instead of Retirement

Aug. 4, 2005 – While representatives from the Government Employee Retirement System said Wednesday they have done all they can to keep paying retiree benefits; they believe the system will not be able to stay afloat until a large debt owed by the government is paid off.
Calling it an unfunded liability, they said this debt totals approximately $899 million— and is a major drag on the system's operations. "Unless this liability is taken care of, there will continue to be deterioration in future benefits given to retirees," Willis Todmann, GERS acting administrator said.
Todmann indicated to senators that the System is currently paying out more in benefits than it is receiving in contributions and "will not last another decade" unless the government moves to take care of what they owe. "Members of the system have been bearing the burden of operation costs for years. Eighty-eight percent of the operating costs have been almost exclusively paid by employees' contributions, which goes to inadequately pay down the unfunded liability. This is a great injustice to the members," Todmann said.
Because attempts made by system officials to sue the government for money have been denied, Todmann urged senators to make a lump sum payment appropriation of $600 million, as well as an immediate increase in employee contribution of 1.5 percent of payroll—or pay the $61 million annual shortfall in operation costs along with increasing contributions. Since the legislature is currently the only body able to set contribution rates, Todmann emphasized that immediate action be taken.
Todmann also pushed for the consideration of amendments proposed in the new GERS Reform Bill where a separation of the system from the legislature would allow GERS to increase contribution rates to members. (See "GERS Debt Approaching $1 Billion Mark "). This will enable the system to help pay down the liability, and enable retirement benefits to continue to be funded in advance of an employee's retirement date—or on an actuarial reserve basis.
Contribution increases would be regulated through a Tier II system, by which government employees hired during fiscal year 2006 would have a different level of benefits than employees still within the system. While this measure would mean that new employees would have to wait longer before they receive benefits, it does enable more money to be generated. In his presentation, Todmann said that if approved, this system would be in place at the beginning of October.
"The system cannot survive another ten years of escalating benefit expenditures without the respective concurrent incremental contribution increases. The only realistic method of insuring that the System will receive the appropriate contribution increases as needed is for the Legislature to vest this statutory authority over contributions in the GERS Board of Trustees," Todmann said.
The Finance Committee also received a $628,960 request from representatives of the Law Enforcement Planning Commission and the V.I. Drug Enforcement Bureau (formerly the Narcotics Strike Force) for fiscal year 2006.
However, Meredith Nielson, acting drug policy advisor to the governor, said that this amount was not enough to continue to enforce all drug and narcotics laws, as well as pursue drug trafficking investigations within the territory. To satisfy these needs, Meredith told senators that the Bureau would need a budget of at least $1.6 million.
Senators present at Wednesday's meeting were Norman Jn Baptiste, Craig W. Barshinger, Roosevelt C. David, Liston Davis, Adlah "Foncie" Donastorg, Louis P. Hill, Neville James, Terrence "Positive" Nelson, and Juan Figueroa-Serville.
Back Talk

Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.




Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.