The Senate Budget, Appropriations and Finance Committee on Tuesday weighed two major proposals to bolster the Government Employees’ Retirement System: one to tighten rules on disability pensions and another to redirect hotel development net bond proceeds into the fund.
The bills reflected growing urgency over GERS’s long‑term solvency, even as they exposed disagreements over fairness, legal risk and how aggressively the pension system should be reformed.
One measure, Bill 36‑0122, sponsored by Sen. Alma Francis Heyliger, would significantly tighten the rules for retirees receiving GERS disability annuities who go back to work.
Under current law, GERS can reduce a disability annuity if a retiree’s wages plus benefits exceed their pre‑retirement salary. The bill would go further, requiring GERS to cut off disability payments entirely if a retiree resumes any employment.
Francis Heyliger said the bill is aimed at preventing abuse of a benefit meant for people deemed “100% or permanently disabled,” questioning why some of those retirees are later able to return to full‑time work while still drawing a disability check.
She cast the proposal as a “clean up” of disability rules designed to stop people from collecting two full incomes, a disability annuity and a new full‑time salary, rather than an effort to punish legitimately disabled retirees who pick up limited side work.
GERS Administrator and CEO Angel Dawson Jr. said the system does not oppose the bill, but stressed that disability approvals already go through a multistep medical review process involving several physicians and a medical review committee. Because of that, he is not concerned that ineligible people are receiving disability benefits. Disability retirees make up fewer than 2% of GERS’s roughly 9,000 beneficiaries, and any suspected cases would still be sent back for medical reevaluation rather than triggering an automatic cutoff.
Lawmakers and legal counsel also raised concerns about whether the proposal could run afoul of constitutional due process protections by cutting off benefits without clear procedures. Sen. Ray Fonseca warned the language could be “overly punitive” and legally vulnerable to challenge, while legislative counsel agreed that disability benefits are a protected property interest and said they can only be modified when a retiree no longer meets the statutory eligibility requirements and due process is observed.
Other senators questioned whether the proposal was too broad, pointing to the phrase “any employment” and noting that disabled retirees may need limited work to offset rising living costs.
The committee ultimately chose not to advance the bill, instead holding it in committee. Francis Heyliger said the measure is meant to tighten safeguards in the disability system without penalizing retirees who have already been properly approved for benefits or those taking on limited side work. She emphasized that her focus is on people who, after securing a specific diagnosis, return to full‑time employment while continuing to draw full disability payments, effectively collecting dual incomes.
Francis Heyliger said she is preparing amendments to explore a tiered disability structure in coordination with GERS and indicated she intends to bring them forward as the bill continues through the legislative process.
In a separate measure, Bill 36-0238, Sen. Avery Lewis proposed steering future net sale proceeds from certain bond-financed hotel projects into the Government Employees’ Retirement System. Under current law, any net sale proceeds left after a bond-financed hotel’s debt is repaid go to the government of the Virgin Islands. Lewis’s bill would instead redirect those proceeds to GERS.
Any payout to GERS would likely come years or even decades from now and would depend on whether and when the hotels are ultimately sold after their bonds are repaid.
After colleagues raised concerns about competing needs, Lewis pledged to amend the bill so that 75% of any net sale proceeds would go to GERS and 25% to the government, earmarked for health care infrastructure.
Lewis argued the shift is needed to address what he called a “present-day crisis” in GERS funding, pointing to the system’s multibillion-dollar unfunded liability and projected cash shortfalls in the coming decade. He said the government did not put direct capital into the hotel projects but instead facilitated them through tax-exempt bonds, making it appropriate to use any eventual sale proceeds to shore up the pension fund.
GERS leadership supported the concept in testimony, saying directing future net sale proceeds from hotel projects to the retirement system would help chip away at its multibillion‑dollar shortfall. Administrator and CEO Angel Dawson Jr. called it a meaningful step toward strengthening the fund, which faces about $3.4 billion in unfunded liabilities and a projected liquidity crunch around 2033 if no further action is taken.
Dawson urged lawmakers to clarify the bill’s language to ensure GERS benefits not only when a hotel is sold before its bonds mature but also when projects reach full repayment and transfer to the government without a sale. He said the system should receive “both sides of the nickel,” regardless of how the asset transitions.
For its part, the Public Finance Authority said it does not oppose the bill, stressing that the hotel bonds are not general obligations of the government and are repaid solely from hotel revenues, not tax dollars. Under current law, once those bonds are paid off, any net sale proceeds go to the government of the Virgin Islands; the bill would simply change the beneficiary, sending that money to GERS instead.
Some senators cautioned against directing all potential windfall revenue to GERS, citing competing needs such as health care facilities and the troubled utility system. In response, Lewis agreed to a 75/25 compromise, pledging to amend the bill so that most future hotel proceeds would still go to the pension fund while reserving a share for the central government.
The committee then voted 7-0 to advance the bill to the Rules and Judiciary Committee, where it will undergo further review and formal amendment before possible consideration by the full Senate. Following the vote, Lewis thanked colleagues for supporting the measure, saying he initially favored directing all proceeds to GERS but accepted a compromise after negotiations. “Seventy-five percent will go to the GERS and 25 percent to the government of the Virgin Islands … to our health care facilities.” He called the measure “a step in the right direction” toward strengthening the retirement system.
