Governor signs bill that protects public workers’ pensions from budget cuts

Vetoes Senate measure that sought to establish LUMA Energy as successor employer to PREPA

By Pedro Correa Henry

Twitter: @pete_r_correa

Special to The Star

On the last day for action, Gov. Pedro Pierluisi Urrutia on Wednesday signed House Bill (HB) 120, which establishes the “Dignified Retirement Act,” protects government pensions from any budget cuts, and “provides a safe and decent retirement to Puerto Rico’s public servants.”

HB 120 has received unanimous support from all political parties in the island Legislature and various labor movements since the previous four-year governmental term.

“Public pensioners dedicated their lives to the service of our people and were the driving force behind the development of our modern society; however, due to administrative and managerial irresponsibility that lasted for decades, the retirement systems were affected,” the governor said through a press release.

“The government of Puerto Rico reformed its main pension system in 2013, significantly affecting the benefits of our pensioners,” he added. “There is no fiscal or legal justification for the additional cuts proposed by the Financial Oversight and Management Board since pensioners, as creditors of the government, already received that adjustment.”

Meanwhile, Pierluisi deemed the oversight board’s proposed cut to pensions “unfair” as the action “affects the finances of thousands of former public servants who would suffer another blow to their assistance, all because of a legal whim of the Board.”

“The purpose of HB 120 is to send a message to the Board that the Government of Puerto Rico will fight to prevent a pension cut, with which I agree, and that is why today I have signed this measure into law,” he said.

However, Pierluisi warned about the legal consequences that could result from the bill’s signing because “the measure in question is inconsistent with the Fiscal Plan and violates the PROMESA [Puerto Rico Oversight, Management and Economic Stability] Act.”

“In compliance with my oath as Governor of Puerto Rico to uphold and defend the Constitution and the laws of the United States and Puerto Rico, and per Section 204 (a) of PROMESA, the Government of Puerto Rico will notify the Board that HB 120 is significantly inconsistent with the certified Fiscal Plan,” the governor said. “However, as I have said, my commitment is to honor all the pensions of Puerto Rico’s government and seek all the ways to achieve it. Therefore, I sign HB 120 in the spirit that the Board reconsiders its insistence on cuts to pensions, which are unnecessary, both legally and fiscally.”

Meanwhile, Pierluisi cast an express veto against Senate Bill (SB) 450, which sought to turn the private consortium LUMA Energy into a successor employer of the Puerto Rico Electric Power Authority.

He said he vetoed the legislation because it undermines contractual obligations and workers’ rights and affects the right to freedom of association and collective bargaining of LUMA Energy workers.

Furthermore, Pierluisi said, SB 450 is “significantly inconsistent with certified fiscal plans in violation of PROMESA.”

“In addition, such a measure has the effect of harming some employees of a private employer by unionizing them under a particular union without having the democratic right to choose their specific union representative,” he said. “At the same time, the measure represents an invalid exercise under the scope of Puerto Rico’s jurisdiction since it is irremediably at odds with federal legislation that regulates and occupies the field of labor-management relations in the private sector.”

Later in the day, New Progressive Party (NPP) Senate Spokesperson Thomas Rivera Schatz said the party delegation would not seek to override the governor’s veto of SB 450.

“Our delegation will not vote to override the veto of Senate Bill 450, neither in the House nor in the Senate,” Rivera Schatz said. “We discussed it at length and the constitutional deficiencies it has, which are in the letter sent by La Fortaleza and which we warned about; it does not have our support.”

Meanwhile, NPP House Spokesperson Carlos “Johnny” Méndez Nuñez supported Rivera Schatz’s stance, although the party’s lower chamber delegation voted in favor of the bill.

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