No one can predict what the stock market will do after Donald Trump’s election, but the Government Employees’ Retirement System analyst Shawn Bowen recommended that the Board of Trustees limit risk and diversify their funds during a meeting Monday night. The analyst was giving his personal opinion.
However, Meketa Investment Group, the consulting firm under contract to GERS, appeared to align with his idea. Meketa’s recommendations were twofold. The first recommendation was to take 10 percent of its equity vestments and place them in bonds. Bowen said the equity investments had been earning quite well recently, but Meketa did not assume they would continue. Bowen said the move would “reduce the volatility” of GERS’ investment and would mean the transfer of about $50 million.
Angel Dawson, the GERS administrator, said he supported that recommendation and another that would move some of GERS’s funds from big stock companies like Facebook, Microsoft, and Apple to smaller companies. The board moved and approved both recommendations.
The situation in Washington, D.C., also arose when the board considered a request from Gov. Albert Bryan Jr. that the board rescind its action last month to raise employer contributions by 3 percent on Jan. 1, to 26.5 percent. In a letter to the board, the governor said the government was not in a position to afford this extra $13 million in contributions.
Board Chairman Dwane Callwood said several times that the increase was not tied to the revenue shortfall from the federal rum cover-over payment. The GERS rescue plan lawmakers enacted in 2022 to save the pension fund from insolvency was based on getting a rum coverall tax return of $13.50 per proof barrel exported to the mainland U.S., but the territory is only receiving $10.50. That’s because the federal Bipartisan Budget Act of 2018 set the per-gallon rate to $13.25 for five years following the back-to-back Category 5 hurricanes of September 2017, but that expired at the end of December 2021.
Board member and former Sen. Ronald Russell, however, said he was not willing to do anything until the governor and Delegate to Congress Stacey Plaskett “aggressively lobby” the present administration (a Democratic one, which many feel would be more receptive to the territory’s position) to take action to return to the territory the more considerable rum tax sum.
Board member Andre Dorsey argued that the board needed to take the argument to Washington.
In the end, the board voted to take Callwood’s recommendation not to rescind the raise in the government’s contribution but to delay it until Oct. 1 of next year. Nellon Bowry, Leona Smith, Dorsey, and Callwood voted in favor of the recommendation. Russell voted against it. Trustee Vincent Liger was absent from the meeting.
