The United Public Servants Union (SPUPR, Spanish acronym), affiliated with the American Association of Employees of Counties, Municipalities and States (AFSCME), started yesterday with a day of orientation and lobbying in favor of the deal it has signed with the Oversight Board and that, if completed, would recover for public employees the savings that thousands have contributed to their retirement for almost two decades.
If SPUPR - which represents 11,000 public employees - manages to get most of its members to support the agreement, they and the rest of the government employees under the so-called System 2000 and Law 3-2013 will be able to recover nearly $1.36 billion corresponding to their retirement, said yesterday the presidents of SPUPR and AFSCME labor economist, Annette González and Juan Romero, respectively.
For the Board, however, the deal with SPUPR is the second collective agreement to be renegotiated in light of the government's adjustment plan.
At the same time, this agreement - which comes after a similar one reached by the Puerto Rico Teachers Association (AMPR, Spanish acronym) - could serve to attract more supporters to the document the Board will file before Judge Laura Taylor Swain seeking to modify over $60 billion in obligations.
The negotiation of collective agreements is within the powers PROMESA granted the Board because, in the Title III process, the fiscal entity acts on behalf of the debtor, in this case, the central government.
"We asked the governor to sit down and negotiate three times, but it didn't happen," González said.
She added that once Swain determined that the government's valid budget is the one certified by the Board, the union understood that it should sit down to negotiate with the fiscal entity, which is operating under the extension granted after the First Circuit Court of Appeals ruled that the appointments of the Board members were unconstitutional, a decision that is now before the consideration of the Supreme Court.
Yesterday, after learning of the agreement between the Board and SPUPR, Puerto Rico Chief of staff Ricardo Llerandi Cruz said that the administration of Governor Ricardo Rosselló Nevares has always been willing to return the funds through a single transfer from the accounts of the Treasury to those of the defined contribution plan under Law 106-2017.
"We will begin the corresponding procedures to carry out this transfer without any additional obstacle," said Llerandi Cruz and added that they "trust that the Board will support this initiative and allow us to implement it as soon as possible, for the benefit of tens of thousands of public employees.
The government representative before the Board Christian Sobrino Vega said that for months the government told the federal entity that it was in a position to transfer the money belonging to public employees and assured that the funds are available.
The agreement
However, the agreement between the Board and SPUPR states that this obligation will have to be recognized within the government's adjustment plan.
According to Romero, the union's "expectation" is that the government will make a payment with the cash it has accumulated.
The agreement also establishes that if the amount owed for retirement contributions exceeds $1.36 billion, the difference will be paid in installments, but not later than 2025.
In terms of rights, the deal with SPUPR is similar to that of AMPR.
The agreement increases the employer's monthly contribution to the medical plan from $120 to $170 and does not touch leave benefits in Law 26-2017.
Employees in SPUPR will also receive a $1,000 bonus for supporting the agreement with the Board. That amount, González explained, would be paid 60 days after the approval of the adjustment plan.
As with AMPR, the SPUPR agreement covers collective bargaining, retirement benefits and the distribution of budget surpluses.
The agreement does not affect already retired public employees, who are represented by the Official Committee of Retired Employees (COR, Spanish acronym) and, in the case of active employees, it only applies to those who contribute to the so-called System 2000 and under Law 3-2013.
According to Romero, the agreement turns the promise to recognize retirement contributions made by public servants into a guarantee of payment, after they lost the benefit of a defined pension almost two decades ago. By the end of the 1990s, former Governor Pedro Rosselló González pushed for the closure of that pension plan and gave way to System 2000, a retirement plan to which only workers contribute.
Even though such legislation would require the creation of separate accounts for each public employee and to invest money according to the established investment policies, the Retirement System Administration (ASR, Spanish acronym) used such resources for the payment of current pensions.
While public employees will receive the principal of their savings, they will not get the interest they should have earned in nearly two decades.
The agreement between SPUPR and the Board is binding, which means that, according to González, in order to implement the deal, employees must support in a vote which will take place on June 17-28.
