The trustees of the Government Employees Retirement System voted at a meeting Tuesday to deny annuities for any future applicants whose accounts are missing any employee or government contributions.
The vote was meant as a rebuke to Gov. John deJongh Jr., whom trustee Edgar Ross said was not living up to his end of an agreement struck last year that was meant to allow some employees who were missing a portion of their government contributions to retire.
The agreement identified a funding source that would be used to pay the missing contributions. However, according to GERS Administrator Austin Nibbs, that agreement was never subsequently signed and the funds have not been released.
Ross stated angrily that without a signed agreement, GERS was violating the law by allowing employees to retire with missing contributions. He said that voting to ban the practice going forward was simply an affirmation of the law.
Before the vote, trustee Carol Callwood said she was concerned the action unfairly penalized potential retirees for “the government’s or the administration’s lack of movement.”
Ross responded that he understood the concern but that the law was the law.
“It’s the same concern that made me agree with the governor that we would pay on his promise that he would do certain things. We have paid and he has done nothing. Are we then to continue to violate the law? I say not,” Ross said.
Trustees voting for the measure were Ross, Wilbur Callendar, Raymond James, Leona Smith and Vincent Liger. Callwood abstained and Desmond Maynard was absent for the vote.
Liger stressed after the meeting that the vote would not affect those allowed to retire without full contributions under the agreement. Those individuals would continue to receive their annuity payments.
Tuesday evening, the governor’s office released a statement challenging the trustees’ representation of the agreement. It said that the agreement was never finalized because it was still uncertain how much the government owed.
“GERS has been asked to quantify the total amount of the financial obligation so that the government could determine the total exposure and how best to meet this obligation,” deJongh is quoted as saying in the statement.
“GERS provided some of the information on Dec. 7, 2012, and indicated that they could not provide the additional information at that time and could not give an estimate as to when it would be available. This scenario has not changed,” deJongh said.
The statement continued: “Certainly Administrator Nibbs and each member of the GERS Board of Trustees can appreciate that the government simply cannot agree to turn over a signed blank check to the GERS without knowing what is owed.”
The statement also said that the governor’s GERS taskforce has completed its review of the system’s troubled financial situation and had forwarded its recommendations to the governor. That report will be shared with Sen. Shawn-Michael Malone, president of the 30th Legislature, by the end of the week, the statement said.
According to the treasurer’s report read at the GERS meeting, the retirement system is still losing money. GERS’s year-to-date collections stand at $86,871,801 while their disbursements are $167,675,131 for a deficit f $80,803,330.
In other business, the trustees voted to approve the bylaws of the new board of Carambola Northwest LLC.
The approval wasn’t without confusion as the bylaws distributed to trustees for review were not the most current draft, leading some trustees to question whether they could vote on the document. After being assured that changes between the draft they saw and the final draft were minimal, the trustees decided to act.
They made a single amendment to the document concerning the qualifications for board members. The bylaws state that the board of the Carambola resort will be comprised of the GERS administrator, two GERS trustees, and two GERS members or nonmembers who have a background in the hotel industry.
Maynard objected to the language concerning hotel experience, claiming it was too vague and, unless it was better defined, a bartender or maid could apply.
The section was amended to specify “hotel management, finance, investment or development experience.”
In executive session, the trustees heard a presentation from a company named Orbitel, which was seeking a GERS investment to use the new viNGN broadband cables to compete with Innovative for cable television services.
The trustees voted to “favorably accept” Orbitel’s presentation and pass it on for further review.
Voting for the measure were Callwood, James, Ross and Liger. Callendar, Maynard and Smith were absent for the vote.
In other business the board voted to:
-direct Nibbs to contact TIAA-CREF about setting up a supplemental contribution program in which government employees could chose to invest additional money in an independent retirement fund;
-reimburse the West Indian Company for capital expenditures made at the Havensight Mall in the amount of $451,338.12;
– and direct Nibbs to issue a request for proposals for additional financial advisors to aid the board in investigation potential investments.