Dec. 14, 2008 — Gov. John deJongh Jr. and Sen. Louis Patrick Hill this weekend issued calls to the board of the Government Employees' Retirement System to delay implementing a 2005 law allowing it to collect greater contributions to the system.
GERS was poised to begin collecting the higher payments in the new year, and to seek a means of collecting the difference between what has been paid and what the 2005 law would have allowed.
The governor and lawmaker both issued press releases this weekend calling on the GERS board to delay implementing the law until hearings can be held on all three islands.
At the Nov. 24 GERS board meeting, administrator Austin Nibbs explained that the Legislature had passed an increase for employee contributions to the system from 8 to 8.5 percent in 2005, but GERS has not put the plan in motion.
"The law is on the books, but we have not implemented it yet," he said at the meeting. "We are in the process of implementing it in the next two to three months." (See "$10 Million Government Payment Puts GERS in the Black — for Now.")
Nibbs told the board the funding will be retroactive, but some kind of installment scheme will have to be employed for those who can't afford to pay a lump sum.
In a strongly worded letter to Nibbs released Sunday, Hill requested that meetings be held on each island to give government employees immediate clarification about upcoming changes to their retirements accounts.
"A great disservice is being done to government employees from the unsettling and erratic statements employees have been receiving from the system, leaving them anxious and disconcerted," Hill said. "The miscommunications are creating a possible avalanche of early retirements based on inaccurate assumptions by employees that they will loose their benefits on Jan. 1."
Hill called for GERS to hold emergency meetings before the first of the year to clarify the issues, which he said are causing concern to many government employees.
In a statement issued Saturday, deJongh asked the GERS board to delay implementation of the 2005 legislation requiring payment of both the employer and employee contributions for any excess leave transferred.
"My administration realizes the devastating impact this legislation can have on potential retirees of the system, and I am committed to working with the system to develop a funding mechanism without such action having a further detrimental effect on the unfunded liability, which now hovers around $1.4 billion," deJongh said.
The GERS board is scheduled to meet Tuesday with the administration's financial team to further discuss implementation and the effect of the reform legislation.
The GERS Board is simply enforcing a law passed by the Senate in 2005, but given the state of the economy, the impact on government retirees could be far-reaching, the governor said.
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