Mapp proposed legislation to increase government contributions to GERS

Gov. Kenneth E. Mapp proposed legislation on May 31, 2018, aimed at improving the finances of the Government Employees’ Retirement System, according to a letter sent to Senate President Myron D. Jackson.

Mapp proposed increasing the government’s annual contribution rate to 23.5%, adding 3% of payroll, with two additional 3% increases in fiscal years 2020 and 2021.

Under the proposal, government employees earning more than $65,000 a year would contribute to GERS up to the salary cap imposed by Social Security. In exchange for the additional contributions, those employees would qualify for pension benefits under a new cap of $75,000.

The administration said GERS had paid out more in benefits than it received in contributions for the previous 17 years. Mapp wrote that the proposed changes would not fully solve the system’s problems, but said the added cash contributions would extend its solvency by one year, to 2025.

Mapp also said the government planned to use the Virgin Islands Housing Finance Authority and Community Development Block Grant disaster-recovery funding to acquire non-performing assets from the retirement system, a step he said would not require legislative action.

In the letter, Mapp said the retirement system’s financial problems would not be solved quickly without a one-time infusion of $2 billion and said his administration would continue to consider additional measures to preserve pensions and extend the system’s viability.

Official source: https://www.vi.gov/governor-mapp-offers-solutions-for-gers/