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GERS administrator warns bill 35-0428 would create unfunded liabilities; letter to governor urged action
Summary
The Government Employees Retirement System (GERS) administrator told trustees that GERS staff quickly reviewed bill 35-0428 and told the governor a key section should be removed because there was no actuarial study or funding for the proposed benefit changes.
Administrator/CEO Dawson told the Government Employees Retirement System board on Jan. 23 that staff prepared a written response to the governor about bill 35-0428, raising concern that one section would grant early retirement benefits without the required actuarial analysis or funding. "There has certainly been no funding set aside for the current and future costs," Dawson read from the letter he said staff sent to the governor.
The administrator said GERS had roughly one day to respond because of timing constraints in the territory's organic act and the governor's deadline. "We therefore most strongly recommend that it be detailed by you," Dawson read, quoting the correspondence to the governor. He said the governor took action consistent with GERS' recommendation on that section.
The letter argued that the section would "dangerously decrease cumulative contributions to the GERS while increasing benefits paid out" and described the proposal as an "unfunded mandate" that could worsen the system's solvency. Dawson told trustees the agency had no actuarial study on the proposed changes and therefore could not support the funding assumptions in the legislation.
Trustees discussed process issues after the report. Trustee Dorsey asked whether the board could obtain a longer review window for future bills so the system could complete actuarial work. Dawson and other trustees said the timing constraint arises from the organic act's deadlines for the governor; they suggested pursuing earlier legislative committee review or requesting language changes so GERS has adequate time to provide analysis. Dawson said staff would seek follow-up meetings and, when possible, be invited to committee hearings to provide analysis earlier in the process.
Why it matters: The administrator framed the concern as financial and actuarial: granting benefit changes without a funding plan can increase liabilities for the retirement fund and could affect its long-term solvency.
No formal vote was taken on policy changes; Dawson said GERS would continue outreach with legislative leadership and the governor's office to try to ensure adequate time for analysis on future measures.
