Conversion of Puerto Rico Government Retirement System Full Steam Ahead
The changes to convert from the current Government Retirement System to a Defined Contribution System for public workers is moving forward as planned as government officials insisted funds for the new system are safe in a trust at Banco Popular.
House Committee on Retirement and Veterans Affairs chair Lourdes Ramos Rivera held a probe last week into the “New Plan of Defined Contributions” , created under Law 106-2017, known as “Law to Guarantee Payment to Our Pensioners and Establish a New Defined Contributions Plan for Public Servants.”
Penned by New Progressive Party (NPP) Rep. Ángel Peña Ramírez, the probe sought to determine the reasons for delays in applying credits to the defined contribution accounts, the profitability of the investments and the status of the funds, which are held in bank accounts.
The retirement system has been underfunded for decades and attempts to rescue it have failed to prevent it from becoming insolvent. The Employees Retirement System (ERS) has been in bankruptcy since 2017. Under Act 106-2017 and Joint Resolution 188, ERS sold its assets and transferred proceeds, in addition to any existing available funds it held, to Treasury’s General Fund. Act 106 and Joint
Resolution 188 also implemented a pay-as-you-go system where the Commonwealth assumed the obligation to pay retirement benefits from its General Fund to retirees as they come due. Act 106-2017 also required that all government employees participate in a new defined contribution system to be established for the first time later this year, consisting of segregated accounts held in trust for the benefit of individual retirees. In February, the Retirement System selected Allight Solutions to manage the defined contribution
system that is slated to go into effect later this summer for the more than 110,000 public workers.
Read more: http://www.sanjuanweeklypr.com/pdf/May-27-19/local.pdf
Page 3 of 5