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HomeNewsArchivesSenate Rules Committee Approves Nibbs for Top GERS Job

Senate Rules Committee Approves Nibbs for Top GERS Job

Feb. 20, 2008 — Rules and Judiciary on Wednesday gave a favorable recommendation to Austin L. Nibbs' nomination as administrator of the V.I. Government Employees' Retirement System, sending it out of committee to the full Senate.
Born on St. Thomas, Nibbs graduated from Charlotte Amalie High in 1967, received a bachelor's degree from Howard University in 1973, and became an accountant. He has worked in finance in several private- and public-sector capacities over the years in New York, Washington, D.C., and the Virgin Islands, and in 1996 received a master's degree from the University of Phoenix. Since 1999 he has been with the Department of Finance, first as deputy commissioner, then acting commissioner, then executive assistant commissioner. His predecessor, Willis Todmann, was relieved of duty last October and has been indicted on charges of embezzlement from the GERS. (See "Former GERS Administrator Charged with Embezzling from Pension Fund.")
Nibbs presented a detailed set of short- and long-term goals for GERS, earning praise from some of the senators. He also was commended for his credentials and experience. The questions were more informational than inquisitorial.
Among the challenges facing the GERS, the most pressing is the pension fund's massive and growing unfunded liability, now approaching $1.3 billion, Nibbs said. Plans by Gov. John deJongh Jr. to float pension-obligation bonds for up to $600 million are crucial in the short term but will not fix the problem, he said. (See "'Determination and Hope' Theme of State of the Territory Address.")
"In order to fund the system," Nibbs said, "the total contribution rate should be approximately 40.3 percent of the payroll cost."
Instead, employer and employee combined pay 22.5 percent of payroll, leaving the pension short about $60 million annually. At some point this structural shortfall needs to be addressed, he said. Issuing pension-obligation bonds just plugs the gap with more debt. But, Nibbs said, the current GERS investment portfolio is making a better-than-expected 14 .6 percent. At that rate, investing bond proceeds in the GERS portfolio would make more money than the cost of the bonds — enough to pay off the entire current annual deficit, blunting the effect of the built-in shortfall. But, like putting your finger in a dike, it's helpful but temporary.
"The correct fix would be for each individual class of employee to be responsible to pay for the actual cost of the benefits they receive," he said.
In a series of unanimous votes, the committee sent on Nibbs' nomination, as well as those of Aldria Harley-Wade to the St. Thomas-St. John District Board of Directors, V.I. Government Hospitals and Health Facilities Corporation; and Imelda N. Dizon to the St. Croix District Board of Directors, V.I. Government Hospitals and Health Facilities Corporation. It held in committee the nomination of Llewelyn G. Reed II to the board of directors of the V.I. Waste Management Authority. The WMA is being absorbed into the executive branch and is to cease being a semi-autonomous agency.
Voting unanimously on all the nominations were Sens. Carlton "Ital" Dowe, Shawn-Michael Malone, Usie Richards, James Weber III, Carmen Wesselhoft, Celestino White and Alvin Williams. The nominations will now be considered by the full Senate. All committee members were present.
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