A month after El Nuevo Día revealed that municipalities and public corporations are not making payments to the "PayGo" system, and given the retirees’ despair due to the lack of accurate information, the Pro-Retiree Movement of Puerto Rico (MPP, Spanish acronym) is considering requesting an intervention of the Department of Justice.
The MPP told this newspaper that, over a year after the creation of the "PayGo" system and the development of a mechanism to privatize the retirement accounts of public employees, there is no information about the Retirement Board that should have been created to implement the pension reform, according to Law 106-2017.
"We are going to demand from the Secretary of Justice to take action against those who are not remitting the money and those who are taking it (which are retirement contributions) from the employees and not remitting it," said retired sergeant and executive director of the Puerto Rican Police Union (SPP, Spanish acronym), Jose Marin Martinez.
"So far, that board does not exist," said Roberto Aquino, president of the Government Pensioners Association, noting that they will also contact the government to request participation in the agency.
Law 106-2017 is the alternative plan designed by the government and the Oversight Board to pay pensions from the General Fund, once the ASR ran out of funds to do so.Last month, El Nuevo Día revealed that, according to data published by the Fiscal Agency and Financial Advisory Authority (FAFAA), municipalities, agencies and public corporations do not fully comply with the contributions that must be made to the General Fund to pay pensions.
The "PayGo" system is not free of controversies. The General Fund seeks that, provided by Law 106-2017, agencies and municipalities cover the payment of pensions for their retired employees.
But several mayors previously told this newspaper that the central government charges them pensions for dead people or employees who never worked for these entities.
Law 106 imposes fines and even prison sentence for those who do not make payments to the "PayGo" system.
The MPP´s decision to request the action of the Department of Justice arises at a time when the Senate intends to examine a request from municipalities so that they do not contribute to "PayGo", just as it happened with the Health Reform.
Given that municipalities would not provide the payments of the Health Reform if the proposal is signed into law, this would imply more responsibilities for the General Fund, already in charge of the "PayGo" system.
Calm regarding Title III
According to Marin Martinez, member of the Official Committee of Retired Employees (COR, Spanish acronym), a group created by the US Trustee to renegotiate the island's debt - including the retirement’s - to date, the government will continue to pay the pensions of some 167,000 because that is what the government has legislated and it has been argued before judge Laura Taylor Swain, who presides over Title III cases on the island.
According to Aquino, currently, retirees must remain calm because there is a statute that states that pensions will be paid.
However, Marin Martinez acknowledged that this could change once the government's debt adjustment plan is completed.
Very low pensions
That is why, for MPP members, it is urgent to ensure a definitive commitment to pensions payment and avoid further cuts to a population that is going through deep financial, psychological and health challenges.
For Marin Martinez, Aquino and also retirees leader, Genoveva Rios Quintero, president of the Association of Former AE and ELA Employees (AESA, Spanish acronym), pensioners are already enduring hardships without the cuts that could occur under Title III.
Marin Martinez said that in San Sebastian del Pepino there is a member of La Uniformada (Puerto Rico Police Department) who is about to retire and instead of receiving about $ 1,100 a month (which was the compensation before Act 3-2013), he would now receive about $ 265 a month .
Manuel Vélez, a Doctor in Business Administration who heads Movimiento 447 (Movement 447), once the defined benefit plan (created under Act 447-1951) was completed, the formula that granted a pension equivalent to 75 percent of the 36 highest salaries that the participant earned, was gone.
Through that formula, Vélez would have received about $ 4,050 per month when he retired. But those changes approved in 2013 would reduce his pension to about $ 2,700.
"That, if the Board does not make any more cuts, "said Vélez. "Pensioners have children, parents and grandchildren," recalled Rios Quintero, who added that the daily dilema among Puerto Rican retirees in is to choose between paying for food or for medication to continue living.
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