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Wednesday, July 17, 2024
HomeNewsLocal newsPlaskett Alarmed at Reports V.I. Government Stopped Paying into GERS

Plaskett Alarmed at Reports V.I. Government Stopped Paying into GERS

Delegate Stacey Plaskett recently wrote Gov. Kenneth Mapp and the V.I. Legislature to raise her concerns about recent reports that the V.I. government has not paid its required matching contributions to the Government Employees Retirement System since December 2016.

At the most recent GERS Board of Trustees meeting, GERS Administrator Austin Nibbs said the government has not made full payments either for employer or employee contributions since December and has made no payments at all for the last three paydays. Nibbs pointed to a line in the treasurer’s report that showed that GERS had deposited $1.4 million in employee contributions in 2017, but last year in January it had deposited $5.6 million. (See Related Links)

“If the reports are accurate, the diversion of any payments due on behalf of employees, whether they be pension fund deposits, or income tax withholdings, is an indicator of the liquidity crisis facing the territory,” Plaskett said in a statement.

She said the news is troubling “as we have a commitment to uphold when it comes to honoring what is owed to our seniors, who depend on the obligations that are due to them.”

In her letter to the governor and Legislature, Plaskett also said not paying the required employer contributions for GERS will only continue worsen the retirement system’s immediate, operational deficit.

The system sells off close to $100 million in assets per year to pay current retiree benefits. Not paying the employer contributions means the amount GERS sells will have to increase by the same amount as the missing contributions. The system is projected to sell off all its assets and be forced to cut benefits by at least 55 percent by 2023 or 2024. But those projections assume the government continues making its regular contributions. Without them, the system will sell off its assets sooner.

Plaskett also said her office stands ready to help.

“As I have previously stated, it is important that the territory use all available resources when it comes to tackling the financial crisis facing our islands,” she said.

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