Press Releases

For Immediate Release                             Contact: Michael J. McQuerry
May 11, 2020                                                        202-215-8524

PRESS STATEMENT

CONGRESSWOMAN STACEY E. PLASKETT ANNOUNCES UPCOMING IMPORTANT REPORT TO CONGRESS FROM THE GOVERNMENT ACCOUNTABILITY OFFICE (GAO) REGARDING ISSUES PERTAINING TO THE PUBLIC PENSION SYSTEM OF THE U.S. VIRGIN ISLANDS 

Washington, D.C. – Congresswoman Stacey E. Plaskett (USVI), released the following statement regarding her request to the General Accounting Office (GAO) to report back to Congress its findings regarding the economic viability of the pension system of the Virgin Islands: 

“As the GAO has noted in a recent report, the U.S. Virgin Islands (USVI) is facing many serious fiscal challenges. A key element of these difficulties stems from the weak financial condition of its defined benefit pension for USVI government employees, the Government Employees Retirement System (GERS). GERS actuary reported that it was only 21% funded as of October 2018, with $3.7 billion in liabilities and $768 million in assets. It is projected to deplete its assets by 2024-2025. 

“Those born in the USVI are United States citizens who stand to be directly or indirectly affected by the collapse of GERS. Decisions made by the federal government may impact the economic situation facing the territory, and may affect the options available to the territorial government to address their public pension crisis effectively. Unlike defined benefit plans in the private sector, the unfunded liabilities of GERS are not federally insured by the Pension Benefit Guaranty Corporation. 

“The territorial government is the USVI’s largest employer, and one fifth of the population is covered by GERS as an employee, dependent, or beneficiary. GERS attracts workers to do important work, such as keeping the United States citizens living on the islands safe, and provides for their financial security in retirement. Furthermore, GERS supports public workers that create an environment for tourism, a very important industry to the economy. 

“The government of the USVI is seeking to address this issue, but also faces other economic challenges concurrently. Compounding these financial challenges is the devastation created by recent major disasters, which has limited tourism and severely reduced other economic activity. In November 2017, the USVI government estimated that uninsured hurricane damage would exceed $7.5 billion. USVI government employees have played an essential role in responding to this destruction and in efforts to rebuild the islands’ housing and infrastructure. 

“GAO reported last year that officials in the USVI government were evaluating the best way to restructure the pension system going forward. However, total public debt outstanding was 68% of GDP in fiscal 2016, and the USVI has not been able to access capital markets at favorable interest rates since January 2017. Considering the crucial role that the GERS pension system plays in the lives of the people of the USVI, and the importance of addressing this issue to restore the long-term economic health of the territory, my office has asked that the GAO report back to Congress on the following questions: 

1. How does GERS compare with other defined benefit pensions on characteristics such as the way it is funded and the benefits it provides? 

2. What is known about the extent to which GERS is able to pay the benefits it has promised to employees, if no changes are made? 

3. What options exist to ensure that the Government of the U.S. Virgin Islands can sustainably maintain and fund the pensions that it has promised to its employees? 

“I look forward to the findings in this report and as soon as those findings are complete and the report is sent to Congress I will ensure that the residents of the Virgin Islands are informed on the conclusions from the GAO.”

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