Austin L. Nibbs, chief administrator of the Government Employees Retirement System, has urged the 32nd Legislature of the Virgin Islands to consider requesting funds for the system from the federal government.
In a letter dated Nov. 20, Nibbs urged the senators to discuss the plight of the retirement fund as the Legislature on Tuesday addressed “a bill transmitted by the Governor of the Virgin Islands, that would authorize the Government of the Virgin Islands to enter into one or more Federal Emergency Management Agency Community Disaster Loans.”
No action was taken then.
Nibbs hopes the lawmakers will consider GERS during its next meeting, when the bill comes up again. He is not an invited speaker and he told the Source that he could not force the senators to consider GERS.
Sen. Positive T.A. Nelson, leader of the minority caucus, told the Source about Nibbs’ appeal, “I’m not certain that it can happen; but is worth bringing up for discussion.”
He said senators were presently discussing whether federal funds were available for semi-autonomous agencies such as the Water and Power Authority. Nelson said he had no problem with Nibbs’ request but did have a problem with the GERS board because it was “reluctant to try anything new.”
Nibbs, in his letter, went over reforms that have been made in recent years – reforms that have generally meant higher contributions from employees and lower benefits. Nelson has proposed that GERS use land it owns to go into a partnership with a private entity to develop a retirement resort.
In his letter, which he also forwarded to federal officials along with the territorial senators, Nibbs said, “During the past three years, we have reached out to the present administration to start a working dialogue without any success. However, in the past few months, we have been invited and met with representatives of the U.S. Department of Interior and U.S. Department of Treasury, and had very in depth and serious discussions. We have also started discussions with Delegate Stacey Plaskett on the status of the GERS.”
Nibbs then put the onus on the Legislature, writing:
“Over the coming months, billions of dollars will be circulating in the territory. Some of these monies should be earmarked to fund the GERS. This is the time to do the right thing for the GERS and the people of this territory. The GERS contributes more than $250 million (multiplier effect of more than $600 million) annually to the territory’s economy. To let the GERS become insolvent will be devastating to the territory.”
Although most of GERS’s difficulties cannot be blamed on the two hurricanes, the storms may have exacerbated the situation. In October, GERS collected $6.3 million and paid pension benefits of $20.1 million – a shortfall of $13.8 million. In September, it collected $746,283 and paid pension benefits of more than $20 million – a shortfall of $19.8 million. The shortfalls have been around for years but the situation became perilous when the government this year quit paying the funds it took from employee checks for their retirement fund and also quit paying the obligated employer’s share.
Nibbs, in his letter, said employee contributions from pay dates July 20 through Nov. 9 and employer contributions from pay date June 22 through Nov. 9 have not been made. Employee loan deductions from July 20 through Nov. 9 are missing. Some retirees have alleged that the holding back of these payments is illegal. Mapp has called it a financial management decision.
“Most of the autonomous agencies are also delinquent in remitting employee and employer contributions and loan deductions,” Nibbs added.
If the system fails, according to Nibbs, “Many of the retirees will relocate to the mainland to have access to affordable housing and health care, and where the cost of living is lower and they can qualify for SSI.”
In his letter’s conclusion he writes to the senators, “As the first branch of government, the 8,545 retirees and over 9,200 active members are counting on you to play a pivotal role in the survival of the GERS.”