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HomeBreaking NewsSenator's Silent Stand Draws Rebuttal from GERS Chair

Senator’s Silent Stand Draws Rebuttal from GERS Chair

One man’s silent protest recently evoked some fighting words from the head of the Government Employees Retirement System. But reaction to the criticism leveled at that lone protestor – Senator-At-Large Brian Smith – seemed as puzzling as his initial gesture.

GERS Board Chairman Wilbur Callender sent a prickly letter to Smith a few days after he was spotted in the Emille Griffith Ballpark, holding a sign that said “Save GERS.” Callender’s Jan. 22 letter was most critical of Smith’s position on GERS Administrator Austin Nibbs.

A liberal use of punctuation drove the chairman’s point home.

“Shame on you, Brian A. Smith!!!” the letter began. “You have attempted to disparage the reputation of the GERS Administrator Austin L. Nibbs; you have joined the group of disingenuous individuals who continue to lament about the ‘Litany of bad investments made by the System.’”

Sen. Brian Smith makes his silent protest at the Emille Griffith Ballpark.
Sen. Brian Smith makes his silent protest at the Emille Griffith Ballpark.
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Nibbs, reached by phone in his office shortly after the letter was issued, said he was perplexed by the lawmaker’s appearance, sign in hand, a few yards away from the GERS building, next to Griffith Park. Smith stood outside, holding his sign for a few days, but never came in, the administrator said.

A few days later Nibbs said he approached the senator-at-large, asking why he took action that way. The pension system administrator invited Smith to visit the office and review position papers written by the GERS staff about their financial status and their prospects.

Callender’s Jan. 22 letter had the same invitation, with a few embellishments.

“As a Legislator, you should already be cognizant of the operations of the GERS; you need to help fix the System and move on to improve the lives of residents of this territory. If you need additional information, please contact Administrator Nibbs. I am certain that he will be happy to keep you informed,” Callender said.

The chairman appeared to take special exception to statements attributed to Smith, saying Nibbs’ job status should depend on productivity or profitability of the pension fund.

Something Callender said Smith should take note of.

“Since the inception of the System, there has been an annualized return of 9.0 percent. During the tenure of Administrator Nibbs, the System has had a cumulative return of 10.59 percent and actual gains of $402,865,743,” the chairman said.

The statement, however, did not address the $1.5 billion dollar deficit that threatens to leave the pension fund out of cash by 2023. If that occurs as forecast, the Virgin Islands will join the list of insolvent public pension funds in Prichard, Alabama; Detroit; Vallejo, California; and the Northern Mariana Islands.

And according to articles published in Forbes Magazine, the New York Times and Bloomberg, hundreds of state and local pension funds across the U.S. are in or near similar circumstances. In 2013, the combined unfunded liability of those systems was estimated at $5.6 trillion dollars.

A 2015 report appearing on the cable news program CNN Money cited two reasons why municipalities are falling in the pension hole: investments largely pegged to the stock market, which took a bad turn during the 2008 recession, and failure by local governments to adequately fund public pensions.

Callender gave the V.I. rendition of that tale in his letter to Smith.

“Two principal reasons for the System’s impending insolvency are: The nine unfunded mandates passed by various Legislatures (and) The non-payment by the Government of the Virgin Islands of $1.6 billion in actuarially determined contributions owed to the System,” he said.

“Just imagine what could have happened if the System had received all or a significant portion of (that) to invest. You would not be campaigning against the Administrator, and I would not be responding to you regarding these issues.”

When reached for comment, Smith said he staged his silent protest because, “There’s too much silence around the GERS matters, so somebody had to do something to call attention to this pretty serious discussion.”

But when asked his thoughts about the administrator’s invitation to enter the building and review the agency’s statements, the senator-at-large bristled.

“It was highly unprofessional and pretty stupid, because I don’t just walk up to people on the Christainsted boardwalk and start talking to them. That’s what happened here,” Smith said.

Two Source articles provide a broader picture on the plight of the GERS. They can be read here and here.

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