Nov. 27, 2006 — Recent efforts by Gov. Charles W. Turnbull to further reform the Government Employees Retirement System have raised concerns among both retirees and government employees.
In July, Turnbull submitted a set of amendments to the GERS Reform Bill, which he signed into law last November after months of debate in the Legislature. According to critics, the amendments would repeal some of the reforms laid out in the original bill, along with offering increased benefits to a "handful" of government employees — which could put an additional financial strain upon the system.
Mary Davis, chair of the Advocates for the Preservation of the GERS (APRS), called the changes "unfair," and said the amendments warrant "further analysis" from senators.
As an example, Davis cited a proposal that raises the cap on how much an employee can receive in annual annuity payments from $65,000 to $85,000. The increase may only benefit "a small set of people," Davis said, and would reduce the amount other government employees paying into the system at the $65,000 level would receive when they retire.
"The most you can get from the system is $65,000," she said. "If you make more than that and want to maintain that kind of salary, then set up an IRA or 401(k) or something. We have to remember that we need to keep the system viable. If the cap is raised, then that can drain the system. We think that the $65,000 cap is more than sufficient."
Also at issue is a proposal to establish a new retirement program for senators, Davis said.
"Currently what we do is, if you're retiring, we take a look at the last five years you worked and average your salary," she said. "That comes out to a certain percentage, and that's how much you receive from the system. What the amendment does is average the last three years an employee works, and that's not fair. They will be getting more from GERS than what they put in."
According to a recent APRS news release, the system would allow senators who have worked for 20 years to collect 100 percent or more of their average salary annually upon retirement. A senator with 24 years of service can receive 120 percent of his or her average salary, while a regular government employee with 40 years of service receives 100 percent, the news release says.
A senator with 28 years of service would be eligible to receive 140 percent of his or her average salary, according to APRS.
"For all government employees, classified and unclassified, to receive 100 percent of the average of their salary based on the last three years of employment, each such retiree must have 40 years of service," the news release said. "Why then, do we ask, does this bill propose that senators … be permitted to work only 20 years and receive the same benefit?"
Similar concerns were also expressed in a news release issued Sunday by the V.I. chapter of the American Association of Retired Persons (AARP).
"The St. Thomas Chapter … of AARP Virgin Islands view with much consternation the attempt by the Turnbull administration to launch another assault on the Government Retirement System with its latest legislative proposals to raise the cap on the annuity for retirees from 20 percent to over 120 percent for senators," the AARP release said.
Any further reforms that affect the "financial health of GERS should be first submitted for an impact study on the system and be considered in public hearings, as is required by our democratic system of government," AARP insists.
The amendments will be considered by the full Senate body during a Committee of the Whole hearing scheduled for 10 a.m. Friday.
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