The San Juan Daily Star
PREPA retirees to fiscal board: Implement pension system proposal
By The Star Staff
The Energy Alliance representing Puerto Rico Electric Power Authority (PREPA) retirees demanded that the Financial Oversight and Management Board implement the proposal submitted by the board of trustees of the PREPA Employee Retirement System that favors the permanence of their present and future pensions without increases in electricity service rates to cover the amount of debt caused by the inaction of the competent authorities.
Johnny Rodríguez Ortiz, president of PREPA’s Retirees Association, claimed that the oversight board, the PREPA governing board, U.S. District Court Judge Laura Taylor Swain, Gov. Pedro Pierluisi Urrutia and Financial Advisory Authority and Fiscal Agency (AAFAF) Executive Director Omar Marrero Díaz, and the members of the island Legislature “have the key to solving the problem of the insolvency of our Retirement System, but they have preferred to apply band-aids and try to work the matter from month to month, lengthening the agony of all retirees, who depend on that check to survive, after years of service rendered to the government.”
Rodríguez Ortiz announced that PREPA retirees will continue to demonstrate every week in front of the oversight board’s offices in Hato Rey.
“We are going to plant a flag here until they solve the problem, because we know that they have in their hands the proposal submitted by the Board of Trustees of the PREPA Employee Retirement System, which will allow them to save our defined benefit pensions, without putting their hand in the pocket of taxpayers, or PREPA subscribers,” he said during a demonstration held in front of the oversight board’s offices in Hato Rey.
Rodríguez Ortiz emphasized that the PREPA Retirement System belongs to all the men and women who provided energy for the island. Historically, he said, “hurricane after hurricane, they raised up the electrical system again and again until they were left devoid of vehicles, tools, equipment and materials to carry out the work, with the sole intention that PREPA would fail, to justify privatization and distribute federal funds among several companies” run by friends of high government officials because so far those companies have not executed projects, “but the money keeps disappearing.”
He stressed that retirees “do not want a two-month economic rescue, nor do we want more increases in rates for the consumer,” and stated categorically that “with the structured plan of our trustees, not a penny is increased to consumers in the electricity rate.”
He said they will continue to pressure the oversight board to respect the 1974 Trust Agreement between PREPA and the U.S. Bank National Association, a document containing detailed provisions governing the issuance of bonds and the payment of debt service. In fact, under the Trust Agreement, PREPA bondholders are entitled to payment only of income deposited in favor of the Sinking Fund or Subordinate Funds, only after PREPA covers the payment of their current expenses, and that includes PREPA retirees’ pensions. Therefore, Rodríguez Ortiz said, PREPA’s bondholders accepted the inherent risk of loss by virtue of that credit priority at the time of purchasing the bonds.
As of February, PREPA owed the PREPA Employees Retirement System $938 million corresponding to the current payment of the fund. It is predicted that, due to the massive number of retirements and the resignations of many PREPA employees, the fiscal crisis of the retirement fund has worsened even more, shortening its life.
On Monday, the oversight board sent a letter to the governor rejecting House Bill 1486, which would give PREPA workers a cost of living adjustment.
Regarding the most recent letter sent to the governor requesting a meeting to discuss the issue of pensions, Rodríguez Ortiz said that “ironically it is for the first time, in three attempts, that they answer us to tell us that they would refer it to the competent authorities.”
“In other words, Pierluisi refused to give us an audience to hear our genuine proposals,” he said.