PayGo Charge goes into effect to pay Puerto Rico gov’t retirees
SAN JUAN – The Puerto Rico government has begun the “PayGo” mechanism for all of its retirement systems and now agencies and instrumentalities will be responsible for putting up the money to pay pensions.
With the start of a new fiscal year July 1, employers’ contributions, contributions ordered by special laws and the Additional Uniform Contribution were all eliminated and replaced by the “PayGo Charge” that will be collected from government entities to pay retirees.
The information is contained in a memo dated June 27 to all government agencies. The systems that will be affected by the change are the government’s, the judiciary, the University of Puerto Rico and those of public corporations.
The Treasury Department will bill public corporations, municipalities, the central government, the Legislature and the judicial branch a monthly charge to cover the benefits to pensioners, the letter reads.
“This amount is what will be known as the PayGo Charge…. It is necessary for the Treasury Department to have the needed cash resources to make payments,” the memo says.
As liquid retirement funds become depleted, the PayGo Charge is expected to increase, the memo adds.
The charge must be submitted to the Treasury before the 15th of each month along with the individual contribution withheld.
The following is Treasury’s notice to government branches, agency heads and public corporation presidents about the PayGo Charge: