St. Thomas Retirees Advocate for Return of Inappropriately Withheld Retirement Contribution

Español Government of the Virgin Islands retirees, also known on the island of St. Thomas as Government Retirees United for Fairness (GRUFF) saw their advocacy work pay off on March 17, 2014 when Governor John DeJongh signed Act 7585 into law.

The retirees had organized themselves late in 2013 to develop a strategy to advocate for the return of a retirement contribution incorrectly withheld from a retroactive salary payment. In February 2014 the St. Thomas based group hired an attorney to research their standing so that they could present a demand to the VI government to have the deduction returned to them.

On March 4 ^th they petitioned the Legislature to consider a single agenda item and were granted a public hearing on the issue. In response to their plight, Senator Alecia “Chuckie” Hansen formulated Bill 30-0318 which proposed the government not only return the 8% incorrectly deducted from the money they received three and a half years earlier, but to also grant the retirees nine (9) percent annum interest and pay the group’s legal fees. The draft legislation also called for return of the money plus interest within ninety (90) days.

While most representatives of the retirement system and the government agreed that the money had been incorrectly deducted from the retroactive checks, GERS and government officials focused on the Systems’ precarious financial status when discussing the return of what they believed to be about $1.5 million in erroneous deductions. It was estimated that this money was owed to 4,618 retirees with the average check amounting to about $328.

During the hearing discussions, the topic of interest on the money was bantered among the Senators present. GRUFF’s attorney suggested 9 percent would be a fair return for the money that had been withheld. According to the GERS administrator nine percent interest would have amounted to about $136,495 and it was suggested the Legislature find a funding source for the interest. However the final legislation, signed by the governor contained nine percent interest compounded over a 3 ½ year period. This was an unexpected increase in payout for the system which currently is facing a $1.2 billion unfunded liability. It is anticipated that the system will become insolvent in less than 10 years if substantial action is not immediately taken.

The total retroactive payment owed to 10,718 current and retired employees amounts to approximately $219 [i] million. However, at the time of the payout the Government had only $45 million to distribute. Therefore, the retroactive payment, made just prior to the 2010 elections, represented only 16.7 percent of the total negotiated increases owed to employees. These outstanding increases were negotiated but never implemented during fiscal years 1989 through 2002.

More news and information on the payments, when they will be made and when retirees can expect to receive them will be published.  AARP Virgin Islands will continue to stay abreast of the information and share it with its members and retirees of the system as they are announced.

AARP members should stay abreast of this issue.  This is the very first item on a long list of legislative initiatives that need to be taken.  AARP Virgin Islands will continue to follow this issue and provide more information as it becomes available.  AARP members should access our website http://www.aarp.org/states/vi  our Facebook page https://www.facebook.com/aarpvi and Twitter http://twitter.com/AARPVI to avail themselves of information to speak to their legislative representatives.