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Friday, March 29, 2024
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GERS Scales Back Budgets

GERS Treasurer report shows the road to bankruptcy. (Screen Shot)

The Government Employees’ Retirement System’s upcoming budget, approved by the Board of Trustees Thursday, shows decreased operations spending; but those decreases pale beside the unfunded mandates that may push the System into bankruptcy within two years. The Treasurer’s report for the fiscal year just finished showed the System had to withdraw $109 million from its investment fund to balance its budget last year.

The budget passed for this coming fiscal year expects to save $618,000 in personnel costs even though it is paying negotiated wage increases. The savings will come because there are 75 employees on staff, down from 83 last year. The cutting of administrative costs was also part of the previous budget as expenditures dropped $841,000 in 2021 from expenditures in 2020. But as the administrative cuts are in the $100,000 range, the difference between contributions and annuities paid out ranges in the tens of millions of dollars.

The pension system paid annuities in September to 8,680 retirees. The number of employees now contributing to the system, according to the Department of Personnel, is around 6,000. The government at one time employed over 8,000 persons.

Last month was a typical one for the retirement system in recent years. It took in $11.8 million in contributions while having to spend $22.8 million in annuities to retirees.

Nellon Bowry, chairman of the board, however, did give the board what he called “some good news.” He said he had met with members of the government financial team and although no specifics were touched upon, it was evident that seeking a solution for the impending bankruptcy was “on the front burner” for the government.

Trustees Ronald Russell and Andre Dorsey asked Austin Nibbs, who presented highlights of the budgets, whether the reduction in staff was also reducing services to retirees. Nibbs said it was not.

The trustees approved two budget documents – the system’s administration and operations budget and the Havensight Mall budget. The proposed Havensight Mall budget is $4 million.

Last year’s budget was $5.2 million. Nibbs said, though the Mall included only 22 employees now, he hoped it would soon rise to 32 employees now that ships are coming back. He said there was a big need for security workers at the site. He also said there would be a $500,000 job repaving the parking lot at the mall this upcoming year.

The proposal for the budget for operations and administration is $16 million, which is half a million dollars less than last year.

In 2020 the proposed budget was $19.4 million. The proposal for the GERS Board of Trustees budget for the upcoming year is $704,000; an increase of $40,000 from this year.

The trustees adopted a new policy Thursday concerning procurement but tabled a medical review disability policy.

In his administrative report, Nibbs said 310 retirees were added to the pension recipient rolls in the last fiscal year while 329 were deleted from the rolls.

Trustee Dorsey asked when updates on GERS software would be concluded. Terence Thomas, who is overseeing the project for GERS, said it would take two to three years. Dorsey said that was too long.

Attending the meeting were Trustees Dorsey, Russell, Dwane Callwood, Leona Smith, and Vincent Liger. Trustee Michael McDonald was absent.

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