With the Government Employees’ Retirement Systems continuing to lose money and projected to be out of funds entirely by 2023, Board of Trustees members voted Wednesday night to save the system a few dollars.
At its continued regular meeting Wednesday night, the GERS board voted to stop publishing advertisements aimed at heirs of deceased retirees to claim eight percent of the 16 percent retroactive pay they are owed.
Heirs of deceased retirees will still have five years to file claims with GERS, as required by law, but the system will stop publishing advertisements about the claims on Dec. 31. The claims, which were mandated by legislation, mostly amount to “about a $100” each and often less, according to GERS Director Austin Nibbs.
GERS General Counsel Cathy Smith explained that the system will follow the law and accept claims for the next five years, but will at least be able to save the cost of publishing the claims.
“We will not deny anyone claims,” said Smith. “We want to set a date to stop actively having to pursue those claims. We are not denying anyone the right to file a claim.”
“We’ve already had to pay excessive interest with no administrative fees,” Smiths aid. “This has been a nightmare. This has cost the system much interest, time and effort.”
Of the 346 deceased GERS members whose heirs are owed eight percent of 16 percent of their retroactive pay, 208 claims have already been filed, explained Smith.
“Most people contacted us after publication this summer,” said Smith. “We have had no new claims in about 45 days. We just want to set a date to be able to stop actively pursuing those claims.”
The board voted to halt publishing the claims on Dec. 31, six months after GERS began publishing them.
The GERS Board of Trustees voted to not amend the meeting’s agenda to address Nibbs’ request to allow Carambola officials to apply for a casino license. Voting not to add the item to the agenda, several members said the issue of a casino at Carambola had not been advertised to the public.
The item will be added to the GERS Board of Trustees’ next regular meeting.
In an effort to save GERS about $500,000 a year, Nibbs recommended that the system contract out for janitorial and landscaping work at Havensight, which is owned by GERS and managed by the West Indian Co., Ltd.
“We are looking at ways to reduce our annual budget and one way is the excessive landscaping and janitorial budget at the WICO mall,” Nibbs said. “We will consider outsourcing landscaping and janitorial services at WICO, saving a cost of about half a million dollars a year. There may be some layoffs and that will be (WICO CEO Joseph) Boschulte’s problem.”
“Our income base is coming down and we have to cut expenses,” said Nibbs.
Due to a combination of not realizing returns on investments, declining income base and unsustainable payments that outpace the contributions to the system by employees and government, GERS continues to lose money on a monthly basis.
GERS financial issues are nothing new. Gov. John deJongh Jr. created a Pension Reform Task Force and Advisory Committee in 2012 to make recommendations to improve the financial situation at GERS. The task force, headed by Economic Development Authority member and Labor Management Committee co-chair Avery Lewis, issued its findings in April 2013.
The task force outlined GERS’ major problems as a growing unfunded liability of $1.8 billion due to insufficient contributions and a decreasing ratio of active members to retirees. The task force outlined legislative actions which could be taken to improve GERS’ financial situation, yet senators have so far not acted on the suggestions.
GERS Board of Trustees members Leona Smith, Carol Callwood, attorney Desmond Maynard, Vincent Liger, Dr. Wilbur Callender, attorney Pedro Williams, Internal Auditor Charmaine Antione, attorney Cathy Smith, Director Austin Nibbs, Investment Office Bruce Thomas and CFO Grasilda Dobbins were present at Wednesday’s meeting. Board member Judge Edgar Ross was not present.
