Retirees Win Battle To Protect Their Government Pensions

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Retirees consider by-laws at GRUFF meeting.

CRUZ BAY – Virgin Islands Government retirees will get an extra check this week, thanks to a group of feisty retirees who have been organizing over the past year to protect their pensions from cutbacks.

Members of Government Retirees United for Fairness (GRUFF) met with a group of 25 retirees from St. John at the Lutheran Church on Friday, June 13, to deliver the good news about the checks.

Retirees have won back 8 percent that was deducted illegally from checks issued in October 2010 which had been sent out as partial compensation to employees for unpaid raises dating back from 1989 to 1997.

Retirees To Get Checks
Several thousand retirees will be getting checks this week, according to Helen Hart, the chairperson of GRUFF. In spite of the fact that these employees had retired by the time these retroactive pay checks were cut, the Government Employees Retirement System (GERS) still deducted the standard employee contribution of 8 percent for retirement from their checks.

GRUFF, which formed in October 2013, mobilized its membership to demonstrate at Senate hearings this past May. Attorney Joseph Arellano was hired to represent them, resulting in special legislation to correct the error. 

Some retirees will see checks amounting to nearly $2,000, according to Hart.

Though this battle has been won and the 8 percent is now being repaid to retirees, the war to protect government employees’ pensions is far from over, GRUFF members warned.

“Once a person has retired, the government cannot adjust their annuity,” declared GRUFF treasurer Barbara Isaacs.

But that’s exactly what the VI Legislature is getting ready to debate.

deJongh Proposes GERS Changes
Governor John deJongh Jr. has proposed changes to the Government Employees Retirement System (GERS) that would help offset the system’s $1.8 billion unfunded liability — the difference between what is being paid into the system in contributions and the obligations to pay out retirement benefits.

Without these changes, the retirement system will collapse within ten years, according to GERS Administrator Austin Nibbs.

Among the proposed changes that will affect current retirees:

• Cutting benefits by 10% to Tier 1 employees (those hired before October 2005).
• Eliminating the annual Cost of Living Adjustment (COLA) now set at 1.5%, for five years.

Virgin Islands retirees are not the only ones facing cutbacks.

“State and local pension plans are under attack,” according AARP CEO Barry Rand, in January-February 2014 issue of AARP Bulletin. “In early December, a federal judge approved Detroit’s bankruptcy plan, endangering the pensions of retired fire fighters, police officers, and other city workers.”

“Recently the city of Central Falls, Rhode Island, cut pensions for workers by up to 55 percent in its bankruptcy proceeding,” the AARP’s Rand continued. “Rhode Island effectively ended COLAs for retirees in 2011. That could cut benefits for retirees by as much as 40 percent over the long term.”

GERS Concern Over deJongh Plan Changes
Another issue of concern in Gov. de Jonghs’ proposed legislation involves raising the cap — the maximum benefit that retirees can collect — from $65,000 to $110,000. GRUFF has estimated that nearly 1,000 government employees, including senators, judges, commissioners, school principals and top administrators, would qualify for higher benefits upon retirement if this proposal is passed.

Nearly 8,000 government retirees receive GERS benefits now, according to GRUFF chairperson Helen Hart.

Retirees Group Questions Benefit Cuts
GRUFF Treasurer Barbara Isaac questioned how the government could consider cutting benefits by 10 percent for the majority of employees while raising the benefits for employees who have received higher pay. 

“While some members are suffering, why raise other people’s caps?” she asked.

With input from GRUFF, senators Shawn-Michael Malone and Tregenza Roach are preparing new legislation to address the GERS’ unfunded liability.  They are expected to unveil this proposal in September and hold public hearings.

“We have to make sure we don’t go to sleep over the summer thinking everything is fine,” Isaac said. “I don’t know if we can win everything, but one thing we have to be steadfast about is not cutting the annuity.”

“They might start (the cuts) at 2 percent, but what about the next year?  she asked. “We didn’t create this unfunded liability. Our elected officials created this problem.”

At Friday’s meeting, Hart distributed proposed by-laws for the organization to St. John retirees for discussion and ratification.  The group agreed to hold at least three of its ten annual general membership meetings on St. John.

GRUFF, which still owes more than $20,000 in legal fees, has been raising funds through tee-shirt sales and soup sales on St. Thomas. The organization is now recruiting new members, asking them to contribute $50 which will be used solely to pay the attorney’s fees.

New members are requested to send a money order (not a personal check) to: GRUFF, P.O. Box 303989, St. Thomas, VI 00803.

Elections for officers and board members will be in November 2016 under the proposed by-laws. Current officers are:  Helen Hart, chairperson; Franklin Sewer, Vice-Chairperson; Lottie Van Holten, Secretary; Barbara Isaac, Treasurer; Lola Roberts Richards, Chaplain; and Lorraine Edwards Evans, Parliamentarian and Sergeant at Arms.