The trustee of the United States is a figure attached to the federal Justice Department, which facilitates the bankruptcy processes in the judicial field. (horizontal-x3)
The trustee of the United States is a figure attached to the federal Justice Department, which facilitates the bankruptcy processes in the judicial field. (Archive/GFR)

Active and retired public employees, including educators, will have voice in the debt renegotiation process of the Island, since the trustee of the United States provided representation to the workers unions in the uninsured and retired creditors committees.

The trustee of the United States is a figure attached to the federal Justice Department, which facilitates the bankruptcy processes in the judicial field.

Yesterday, trade unions and representatives of the Pro Pensioner Movement of Puerto Rico (MPPR, Spanish acronym) celebrated the decision of the trustee Guy G. Gebhardt, while they received with fortitude what is expected to be one of the hardest negotiations, due to the extent and complexity of the Puerto Rican government fiscal crisis.

The lawyer and expert in bankruptcy processes, Sharon L. Levine, said she felt “extremely happy” with the designation of Blanca Paniagua, president of the United Public Servants' (SPU, Spanish acronym) retirees chapter, associated with the American Federation of State, County and Municipal Employees (AFSCME).

Paniagua will serve, along with other eight people, in the Retirees Committee, created by the trustee of the United States in order to participate in the government case under the Title III of PROMESA law.

“The pensions issue is probably the most important one faced by the workers and the retirees throughout this process”, said Levine, partner of the Saul Ewing law firm and the one that has played a crucial role in the bankruptcy process of the city of Detroit.

Even though there was no creation of a creditors committee in Detroit, the AFSCME was essential in the protection of the retirees. Although the compensation of the retirees in Detroit was preserved almost in their totality, they lost benefits related to health coverage.

Levine assured that the negotiation process will be long and complex and that, as a result of it, the trade union is interested in building bridges to community organizations and to the nonprofit sector of the Island, in order to identify potential solutions to the crisis.

Monumental debt

Last May 5th, when the Fiscal Oversight Board called upon the protections of Title III for the central government, it indicated that the pensions obligations of the biggest retirement systems of the government were around $49,562 billion. It will be added to that figure the public debt, which is of around $74,000 billion.

In order to solve the matter before the consideration of judge Laura Taylor Swain, the trustee of the United States created the retiree committee and the uninsured creditors committee, whose members he designated yesterday.

The trustee didn’t designate an uninsured creditors committee for the Puerto Rico Urgent Interest Fund Corporation (COFINA, Spanish acronym). Among the ones designated by Gebhardt there are no municipal insurer which guarantee part of the debt of the Island, and no bondholders either that, according to sources, requested to be part of said committees.

Besides Paniagua, Gebhardt designated Carmen Núñez, Juan Ortiz, Lydia Pellot, Marcos A. López, Miguel Fabre, Milagros Acevedo, Rosario Pacheco and José Marín.

The designated ones represent the retirees of the State Insurance Fund Corporation, the University of Puerto Rico, Education, the Judicial System and the Police.

“We will be calling the trustee with a view to hold a meeting as soon as possible”, said Marín, retired sergeant and executive director of the Police Union. “We will be the voice of the retirees, but also the voice of those employees who are listed for that plans”, added Marín, while he remembered there were cuts to the pensions already.

Teachers with a voice

The committee of uninsured creditors of the central government will be integrated by seven members, including the creditor to which the governments owes the most, Total Petroleum Puerto Rico.

Besides, the group will be integrated by Genesis Security, Puerto Rico Hospital Supply, Unitech Engineering and Doral Financial Corp. The failed financial institution seeks to recover the money from an alleged contributory agreement, reported The Wall Street Journal.

The uninsured creditors group is completed by the Service Employees International Union (SEIU) and the American Federation of Teachers (AFT). The latter, denounced last April the negative impact that the budget cuts in the fiscal plan would have on the education.

“The resources for teachers have always been limited, not only their salary, but also the items they need in order to do their work”, said the president of the Teachers' Association of Puerto Rico (AMPR), Aida Díaz.

She explained that for several weeks, knowing that with the fiscal crisis they will try to get “money everywhere”, the AMPR decided to form an alliance with the American Federation of Teachers (AFT), so they could take part in the renegotiation process of the debt.

The educator explained that the teachers pensions have been affected, but there are also thousands of active teachers that haven’t even got the minimum increases the government subscribed by contract.

In the same way, she claimed that many teachers indebted themselves under a program of the Department of Education, which promised higher salary compensation if they got a better educational background, and none of that has been complied.

“We will fight for everybody’s rights”, said Díaz.


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