A preliminary report submitted to a federal judge says the shortfall in employer contributions to the Government Employees Retirement System is between $4 million and $5 million dollars.
The document was prepared as part of a show-cause hearing oin which officials of the retirement system are demanding payment to cover hundreds of government employees.
But consultants who prepared the “Summary of the Calculation of GVI’s Obligation and Payments to the GERS” cautioned the court that their calculations in the draft report may not be reliable.
RSM US, LLP is a tax, audit and consultant service called in to determine how much money both the government and the retirement system were accountable for.
Those who put the report together were asked to look at employer contributions to the retirement system from Jan. 1, 2010, to Dec. 31, 2019. Officials at the GERS were also asked to hand over records showing how much money was collected in employee contributions for the same period.
“The calculation RSM performed indicates the GVI owes the GERS between approximately $4 and $5 million (the “Estimated Range”) associated with GVI’s statutory employer based obligations,” the draft report said.
But at a hearing held Nov. 5, the system’s information technician told District Court Judge Curtis Gomez they could not do so. Terrence Thomas said the way the electronic records system is set up, it could only produce a list of contributions for individual government workers from they time they joined the system until they left.
Gomez said the court was not satisfied with the effort made to produce the required records and declared GERS in contempt of court. The judge gave pension officials until Monday, Nov. 25, to comply.
Last week, General Counsel Cathy Smith asked the court for more time. Smith said Nov. 25 is the day Gov. Albert Bryan Jr. and members of the 33rd Legislature visit GERS headquarters on St. Thomas to discuss the future of the pension system.
Smith called the meeting “crucial for the future of the GERS.” The judge granted the motion for continuance Nov. 20.
In the 2018 annual overview of the pension system, officials said the has been an annual shortfall in employer contributions since 1996.
“Each year thereafter, contributions collected have been less than the benefit payments and expenses. In 2017, there was a shortfall of $164 million, and a shortfall of $83.8 million for the nine months in fiscal year 2018. Annual shortfalls between contributions collected and benefit payments and expenses since 2000 have caused the system to withdraw $1.5 billion from the portfolio to fund the retiree payroll,” the overview authors said.
That report was presented to the 31st Legislature Committee on Finance by GERS Administrator Austin Nibbs.