Puerto Rico bankruptcy: Judge to hear union pension concerns separately
SAN JUAN – U.S. District Court Magistrate Judge Judith Dein, who is assisting federal Judge Laura Taylor Swain in Puerto Rico’s bankruptcy process, told unions seeking discovery on alleged irregularities with government pensions that their request may be heard before the April 25 omnibus hearing.
In February, the American Federation of State, County & Municipal Employees International Union (AFSCME), American Federation of Labor & Congress of Industrial Organizations (AFL-CIO), American Federation of Teachers, the United Automobile, Aerospace & Agricultural Implement Workers of America (better known as the United Automobile Workers [UAW]), Service Employees International Union (SEIU), on their own behalf, their local affiliates in Puerto Rico and other unions, sought discovery information on pensions to prove the government may be breaking the law in its handling of retirement funds.
The unions contend the government has “failed” to create individual defined-contribution accounts, “failed” to appoint a new retirement board and “appears to be holding a single omnibus ‘Employee Withholding’ account, containing not only $133 million of the ‘individual defined-contribution retirement account’ money, but also other commingled assets, including loan repayments being made to the commonwealth.”
They further said: “Since July 1, 2017, when employees should have been able to invest their individual retirement accounts in low-cost index funds as stated in the March 2017 Fiscal Plan Certification, the S&P 500 has risen from 2,423.41 at market close on June 30, 2017, to 2,701.33 at market close on Feb. 21, 2018—an increase of 11.4 percent. As far as the commonwealth employees know, their mandatory contributions have essentially been hidden under a mattress by the commonwealth that entire time.”
In an order issued Tuesday, Magistrate Dein ordered the parties to confer about an alternate hearing date in Boston, Mass., and that she was available for a hearing on April 19 or 20.