Retirees on board

Thursday, July 7, 2016 St. Croix Avis Newspaper

Turns out there a couple of people thinking in the future as opposed to the now — unlike elected officials looking for a reelection ploy — when it comes to the future of the Government Employees' Retirement System. We are talking about St. Croix Government Retirees Inc., members of which met last month at Cast Iron Pot restaurant and questioned suing the VI government for missing contributions to the pension system. The question arose after the members' elected representative and former Judge. Edgar Ross, discussed several issues facing the GERS' and specifically that of legislation signed into law by Gov. Kenneth Mapp directing GERS to re-instate its loan program. And, contrary to what some politicians are saying publicly, those members do not want the loan program reinstated if it will negatively impact the system. Ross. invited to speak to retirees, explained why board members chose to defy the law by voting at its last meeting not to begin disbursing loans. He told them that the VI government at one point owed the system some $400 million in unmatched contributions, forcing GERS to turn to the investment market to make up those funds. "When we stopped receiving or when the non-receipt of contributions from the government became too overbearing, we found that the system had to go and sell stocks in the stock market to make benefits," Ross told retirees. He added that since GERS began selling stocks, the assets dropped to about $600 million from $1 billion and that were the borrowing to continue, the system would have gone bankrupt within the next five years. The system could not continue to borrow money from the stock market and what people don't realize — not only for the alternative investment programs but for the loan programs, which is also an alternative investment program — you have to get the money from someplace and it was coming from Wall Street," Ross said. He noted that when GERS found out individuals were retiring without the system getting the necessary contributions from the VI government, it stopped permitting workers from retiring if all contributions were not paid up. At one point the system was owed "$400 million for just people who were retiring and the government hadn't paid in its contributions" and this did not include those already retired, which went into the unfunded liability and is now over $3 billion, Ross said. Retirees also learned from Ross that in addition to halting the loan program, GERS also took other measures such as increasing employee contributions and so far "the increase in contributions and other savings have at least stopped the bleeding. ." As a result. GERS has not needed to borrow money from Wall Street to pay benefits since January, he said.

When Mapp signed the legislation into law, GERS board members felt the action was not"prudent" and voted to defy the law directing it to give up to $20 million in loans — $10 million per district — with loan amounts up to $10,000 per member. "Where are we, going to get the money. The Legislature didn't give us the money to re-institute the program," Ross said, adding it would be a matter of going back to Wall Street to borrow again. He noted the board has never said it would never re-instate the loan program, but that can only be done if there's a source of funding. In the end retirees, who crowd- ed the meeting room, asked whether the GERS could take the government to court and Ross said simply that the board is evaluating methods to get the contributions due, but recognized that it is a losing battle. "Remember, you can go and sue the government and get any judgment you can, but you can't collect because the government assets are not available," he said. We applaud the members of St. Croix Government Retirees Inc. for their due diligence as well as Ross for taking the time to explain in detail what the board is facing, without the noise from politicians. It's too bad they can't take a page from Ross' book and tell their constituents like it is instead of pushing to win votes from a few, and not caring whether they bankrupt the pension system for all.