Fiscal board questions amendment to retirement law that would benefit mayors
SAN JUAN – The executive director of Puerto Rico’s Financial Oversight and Management Board, Natalie Jaresko, on Monday questioned Senate Bill 1148, which proposes to retroactively change the date that applies to participants that entered the Employees Retirement System (ERS) on or after Jan. 1, 2000, to benefit a few dozen mayors.
The mayors, most of which already get substantial pensions, would instead be covered by the old ERS’s defined-benefits program, she said.”Based on our review of the Bill, we believe it is not consistent with the certified Fiscal Plan for the Commonwealth.”
The commonwealth created System 2000 to close the defined benefit program for all new participants and “try to protect the financial condition of the Commonwealth’s largest retirement system,” she said.
At that time, all ERS participants who entered the system on or after Jan, 1, 2000, would be covered solely under System 2000.
“Amending this date now, 20 years later and when the financial condition of ERS is materially worse, would increase the amount of monthly PayGo payments. Therefore, the Bill is inconsistent with both the certified Fiscal Plan and the certified Budget for the Commonwealth,” she reiterated.
“Moreover, such an arbitrary benefit increase that applies to a select group of ERS participants that have comparatively high pension benefits would create a dangerous precedent, especially at a time when the assets of ERS have been depleted and ERS participants face reductions in their pensions.
“Finally, we request that you provide the fiscal analysis of the Bill. We would be pleased to discuss this matter in more detail with you and your staff at your convenience,” she wrote to Senate President Thomas Rivera Schatz and House Speaker Carlos Méndez Núñez.