Fiscal board accepts higher threshold for pension cuts
By John McPhaul
Senate Finance Committee Chairman Juan Zaragoza Gómez said Thursday that Financial Oversight and Management Board Executive Director Natalie Jaresko has agreed to increase the threshold for cuts to monthly pensions of public employees in Puerto Rico to $2,000.
“The Board indicated that they are willing to raise the threshold [for cuts] to $2,000,” Zaragoza said in response to questions from the press. Those who receive more than $2,000 would be subject to the 8.5% cut.”
With the change, Zaragoza Gómez said, more than 85% of the pensions of public employees would be protected from cuts. He added that the amount needed to make up for the cut would also drop to $44 million a year.
The proposal agreed to with the Official Retirement Committee establishes that the cuts to pensions would be for those of more than $1,500. The senator acknowledged, despite the fact that the oversight board is willing to increase the threshold amount, that some pensioners are not willing to endorse the agreement, which has to be ratified by vote.
“This is a quantitative but philosophical issue as well,” Zaragoza Gómez said. “There are colleagues who are going to tell you that, even if they raise the threshold to $5,000 and 100 pensioners stay out, they are going to vote against it. It is not an issue of money, it is that they will not tolerate not even a little, not a cut of one penny to the pensioners. And you have to respect that position.”
The oversight board is set to meet today to discuss the debt adjustment plan.
The meeting with Jaresko took place on Wednesday afternoon at the Capitol and was attended by legislative leaders and other government officials.