Mass Exodus of Non-Vested VI GERS Members Causing Cashflow Problems for Pension System

[TexasTowelie]

MASS EXODUS OF NON-VESTED G.E.R.S MEMBERS, MOST OF THEM YOUNG VIRGIN ISLANDERS, CAUSING CASHFLOW PROBLEMS FOR PENSION SYSTEM, NIBBS SAYS


Young government employees with less than ten years in the Government Employees’ Retirement System (G.E.R.S.) are leaving the pension system en mass, G.E.R.S. Administrator Austin Nibbs said during a board meeting on Thursday.

The exodus, he said, was putting additional strain on a system whose years are numbered, and stressed that if the plan sponsor, which is the Government of the Virgin Islands, failed to act soon by shoring up G.E.R.S., which needs hundreds of millions of dollars not for complete survival, but to stay afloat, then in 2023 or sooner, the pension system would collapse and bring down the territory with it. A January 2017 G.E.R.S. survey concluded that the U.S. Virgin Islands would lose 50 percent or more of disposable income were G.E.R.S. to collapse, and many retirees would relocate to the U.S. mainland where they’d have access to affordable housing and health care, and where the cost of living is lower and they could qualify for Social Security benefits.

“Members who are not vested are leaving. So far from January to March, we have refunded $1.4 million to members who are not vested and have left the system,” Mr. Nibbs said during the Thursday board meeting, held in the G.E.R.S. boardroom in Orange Grove on St. Croix, and in St. Thomas via conference. “It is happening, and it will continue to happen if this system is not shored up or the plan sponsor does not give assurance to these members that something will be done to maintain the system — especially those that are leaving.”

He added, “Young people are leaving the system, so that creates a cash flow issue for us also.”

Read more: https://viconsortium.com/news-2/mass-exodus-of-non-vested-g-e-r-s-members-most-of-them-young-virgin-islanderscausing-cashflow-problems-for-pension-system-nibbs-says/