GERS board votes to delay 3% increase in employer contributions

A 3% increase in the government’s contribution to the Government Employees Retirement System will not take effect on Jan. 1, after the GERS Board of Trustees voted Monday night to delay implementation for nine months.

The vote came in response to Gov. Albert Bryan Jr.’s request that board members rescind a resolution increasing the employer contribution rate, because the government doesn’t have enough money to pay the additional $13 million to $14 million per year. The increase “is simply unsustainable under the current financial circumstances,” according to a Nov. 8 letter from Bryan to GERS Board Chairman Dwane Callwood.

GERS Administrator Angel Dawson read the letter during Monday night’s board meeting, and Bryan wrote that he is still awaiting consideration of a potential $90 million reimbursement if Congress retroactively extends an increase in the rum cover-over rate. The rate is important because lawmakers created a plan in 2022 to save GERS from insolvency using a special purpose vehicle that utilizes excise taxes collected on Virgin Islands-made rum that is imported into the continental United States, or “covered over” back to the territory. The funding mechanism assumed a cover-over rate of $13.25 per proof gallon but that rate had already expired, reverting back to $10.50 and leaving a major funding gap.