Bryan submitted proposal to refinance debt and direct savings to GERS

Gov. Albert Bryan Jr. submitted legislation on Dec. 28, 2021, proposing a refinancing and restructuring of a significant portion of Virgin Islands government debt to free revenue for the Government Employees’ Retirement System.

According to Government House, the proposal was developed with the 34th Legislature's Senate subcommittee on GERS, as well as with GERS and its actuary.

The administration said the measure would use matching fund receipts from the U.S. Treasury as the financial base for the transaction. It would create a separate entity, the Matching Fund Special Purpose Securitization Corporation, to issue bonds that would allow the Public Finance Authority to restructure outstanding matching fund bonds.

Government House said the proposal also would allow issuance of a GERS bond by the Public Finance Authority or another entity as an in-kind contribution to GERS.

In a transmittal letter to Senate President Donna Frett-Gregory, Bryan said GERS actuary Segal and Company had projected the retirement system would become insolvent by October 2024 or sooner. The administration said insolvency would require substantial reductions in retiree benefits and would shift responsibility for retirement payments to the Virgin Islands government, adding pressure to the general fund.

Government House said Segal and Company determined that if matching fund receipts remained at least at current levels, the proposed GERS bond issuance would provide financial stability and liquidity to the system and avoid benefit reductions.

Bryan asked the Legislature to consider the measure as quickly as possible.

Official source: https://www.vi.gov/governor-bryan-sends-down-new-collaborative-proposal-to-refinance-government-debt-and-stabilize-gers/