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Tuesday, July 16, 2024
HomeNewsLocal newsGERS Ups Government Contributions But Still on the Road to Collapse

GERS Ups Government Contributions But Still on the Road to Collapse

The GERS building on St. Croix.
The GERS building on St. Croix. (Source file photo)

After members of the Government Employees’ Retirement System Board of Trustees heard their treasurer’s report Thursday, board member Carol Callwood said, “we are quickly getting to a place we don’t want to be.”

The report contained numbers that don’t bode well for the system’s future. This September contributions from the government are down compared to September of last year.

The government contributed $7 million this year in September compared to the $8 million in September last year. Employee contributions did rise from $3 million last year to $4 million this year. However, employee contributions for the fiscal year to date are down from $52 million to $49 million.

Board members said they hope to see a little more in government contributions beginning in 2020. The board voted to raise the government required contribution by 3 percent on Jan. 1. The government contribution was last raised by 3 percent in 2015.

Austin Nibbs, administrator and chief executive officer of GERS, said the Legislature gave the board the power to make that increase. He added that he thought the increase of 3 percent would be automatic every five years but learned that the motion needed to be approved at the board meeting.

The government, which had problems making timely payments to GERS during Gov. Kenneth Mapp’s administration, has according to Nibbs been making timely payments of its required contributions.

The financial report showed GERS made annuity payments of $22 million in September of this year compared to payments of $21 million in September of last year.

Overall the report showed GERS made $24 million in disbursements this September, about $10 million more than it collected.

The report showed that in this fiscal year to date GERS has lost $91 million. At this point in the last fiscal year it had lost $62 million.

Nibbs told the Source GERS would run out of money to pay full annuities by 2023 or sooner if the market turns bad.

To keep cash liquidity GERS has been selling off its assets. In July it announced the sale of Carambola Beach Resort and Spa for $10 million. GERS became owner of the Marriott resort after the previous owner defaulted on a loan.

The one bright spot in the financial report is the rent GERS collects from its Havensight property. It collected $431,000 in rent this September, up $50,000 from last September.

Currently 8,685 retirees collect retirement checks from the system.

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