The San Juan Daily Star
Nearly 100,000 public sector employees to receive PAD bonuses
By The Star Staff
Gov. Pedro Pierluisi Urrutia announced Monday that on or before Dec. 1, 98,270 employees of different island government agencies will receive a bonus of $2,954, as established in the central government’s debt adjustment plan (PAD by its Spanish acronym).
In addition, the PAD establishes a greater bonus to the 9,452 employees represented by the Public Servants Union (SPU/AFSCME by its Spanish initials), who will receive $11,360 because they supported the PAD. The payment stipulated in the PAD is a result of the government exceeding collection expectations, which means it can make additional payment to its creditors.
“Our commitment to public servants is unwavering,” the governor said in a written statement. “The adjustments we have made to our finances have yielded results and now we have to meet the needs of our public employees, who have been affected by the budget cuts of the past while the government was going through a fiscal bankruptcy. We will continue, at a steady pace, to establish strategies that contribute to the growth of the economy, while recognizing the service work of our government employees.”
Employees who qualify to receive the PAD bonus are those public servants eligible to receive the Christmas bonus and who are employees of a public entity that is subject to the certified central government fiscal plan. The government of Puerto Rico managed to get the Financial Oversight and Management Board to include the maximum number of public servants to receive the PAD bonus, since they are the ones who must annually certify eligibility, as long as the financial results established in the certified fiscal plan are exceeded.
Like the Christmas bonus, the PAD bonus is considered part of the ordinary income of public servants and will be subject to the corresponding federal and state withholdings.
For the past five years, the central government has been immersed in a bankruptcy process, which culminated this year with the approval of a PAD approved by the federal court. The PAD included an 80 percent cut in the payment of the central government’s debt.
David Skeel, the chairman of the oversight board, said in a written statement that: “The Plan Support Agreement between the Oversight Board and AFSCME/SPU represented a critical step on the path to the final confirmation of the Adjustment Plan that reduced Puerto Rico’s debt by 80 percent and saved Puerto Rico more than $50 billion in debt service payments.”
“All parties affected by Puerto Rico’s unsustainable debt have already benefited from that Adjustment Plan: bondholders and other creditors whose recovery was fair, public employees whose collective bargaining agreements were honored, retirees whose pensions were not cut, and residents of Puerto Rico whose tax money goes to government services rather than unsustainable debt service,” Skeel said. “As Puerto Rico’s recovery strengthens, eligible government employees will receive their share of the top performance. The Oversight Board attempted to negotiate similar agreements with other public employee groups and unions, but ultimately only AFSCME/SPU members were willing to support the plan. For this reason, the agreement guarantees a greater share of the surplus to the employees represented by AFSCME/SPU. Payments issued to eligible public employees guarantee that the promise made in the Adjustment Plan is a promise fulfilled.”