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AMPR: Gov’t still must address pension claims in wake of unfavorable appeals ruling


Puerto Rico Teachers Association President Víctor Manuel Bonilla Sánchez

By The Star Staff


The Puerto Rico Teachers Association (AMPR by its Spanish initials) and its local union insisted on Wednesday that the government must address their claims for a decent retirement after a federal appeals court ruling upheld changes to their pensions that critics say will destine thousands of teachers to poverty in their senior years.


“The decision of the U.S. Court of Appeals for the First Circuit rejecting the arguments of other teaching groups and endorsing the confirmation of the Debt Adjustment Plan is something that had been foreseen. As exclusive representatives of the teachers, we tried to get a better deal for the teachers long before this plan was approved,” AMPR President Víctor Manuel Bonilla Sánchez said in a written statement. “Also, we had challenged it before Judge [Laura Taylor] Swain and warned that the consequences would be disastrous for the teaching profession and for public education.”


The Court of Appeals struck down a challenge to the commonwealth debt adjustment plan Tuesday in a win for the Financial Oversight and Management Board and various other stakeholders. Judge William Kayatta wrote the decision in the case brought by teachers’ organizations seeking to overturn the plan’s treatment of their pensions. The two other judges on the panel agreed with Kayatta.


The teachers’ organizations that submitted the request were the Puerto Rico Federation of Teachers Inc. (FMPR by its Spanish initials); the Educators (as) Magisterial Group for Democracy, Unity, Change, Militancy and Trade Union Organization Inc. (EDUCAMOS); and the National Union of Educators and Education Workers Inc. (UNETE).


The appeals court sided with arguments to the effect that as part of the debt adjustment plan, provisions of commonwealth laws that are inconsistent with the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, are preempted. Such preempted provisions include all laws, rules and regulations, to the extent that they give rise to obligations of the debtors discharged by the plan and the confirmation order pursuant to PROMESA. They also include laws enacted prior to June 30, 2016, to the extent that they provide for transfers or other appropriations after the enactment of PROMESA, including transfers from the commonwealth or any of its instrumentalities to any agency or instrumentality, whether to enable such agency or instrumentality to pay or satisfy indebtedness or for any other purpose, are preempted to the extent inconsistent with the plan’s discharge of the debtor’s obligations.


The oversight board noted that now the teachers join all other governmental employees who converted to defined contribution plans several years ago.


The Plan of Adjustment, confirmed by U.S. District Court for the District of Puerto Rico on Jan. 18, cuts the Puerto Rico government debt by almost 80% and saves about $50 billion in debt service payments, the board said.


Teachers “were given unfunded promises,” the First Circuit said. “Congress left it to the Board, subject to review by the Title III court, to adjust those unfunded promises so the Commonwealth would have a chance to reset its financial footing and, in so doing, ultimately benefit all the island’s residents.”


The Plan of Adjustment enables teachers to participate in Social Security and creates a way for teachers to contribute safely and securely to defined contribution plans that empower teachers to retain control over their own retirement savings, the oversight board said.

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