Dear Source:
From time to time, the staff of the Government Retirement System has warned the Governor and members of past Legislative bodies as well as the current Legislature about the dismal state of the retirement system. Following those warnings, I have seen no indication that the Governor or the Legislature is moving to take remedial action to reform the system. The GERS through the Governor has submitted proposed legislation to reform the system, but the measure has been ignored by Legislators who believe that reform will hurt current Government Employees. To the contrary, if reform is not addressed, current and future employees will have to deal with a broken system and without the resources to fix it. The continuous failure of the Governor and the Legislature to act appropriately, could result in payless pay days for retirees in the future, and at the rate the system is paying out (more out than in), disaster might be not to far off. I now see that an income producing asset (Havensight Mall), of the GERS which contributes to the system may be acquired through eminent domain for the expansion of the Long Bay Road. If that action is allowed to stand, it will deal a big blow to the financial health of the system. The members of the Legislature should hold hearings on the matter determine if there are alternatives to the proposed action. If the property is acquired, it will certainly diminish the earnings of the system, short and long term, but moreover, justify the need for the reforming of the system.
The unfunded liability of the retirement system grows by the hour and unless immediate action is taken, it will get worse and those who have a fiduciary responsibility for the well being of the system (Governor and Legislature), will have to answer to the public at large.
The GERS like many other public employee retirement systems in the 50 states has invested in various financial instruments to earn money for the system, but with the poor performance of the financial market, not much of a return on investments can be expected. Interest rates are the lowest in over 40 years; it may help homebuyers, but not retirement systems.
So the Government of the Virgin Islands through its elected representatives must awake and take the appropriate reform action now.
Eric E. Dawson
Fairfax, Va.
Editor's note: Eric Dawson was formerly a V.I. Commissioner of the Economic Development and Agriculture Department.
We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to source@viaccess.net.
