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  • Writer's pictureThe San Juan Daily Star

PREPA unions vow to defend pensions after fiscal board asks for repeal of CBAs

Puerto Rico Electric Power Authority Retirees Association President Johnny Rodríguez Ortiz

By The Star Staff

The oversight board this week asked U.S. District Judge Laura Taylor Swain to allow it to end the collective bargaining agreements (CBAs) with PREPA unions, arguing the utility cannot pay the unaffordable pension and grievance claims.

As previously reported by the STAR, the oversight board said PREPA has two remaining CBAs – one with the Electrical Industry and Irrigation Workers Union (UTIER by its Spanish initials), with some 139 active members remaining, and one with the Independent Professional Employees (UEPI), with some three active members remaining.

Each of the CBAs require, among other things, that PREPA’s current pension system continue to operate and be maintained as a fully funded trust.

“PREPA cannot assume its CBAs because it is unable to cure the significant multibillion dollar underfunding of its defined benefit plan, meet future funding obligations to maintain the system as it currently exists and as required by the CBAs, or pay the unions’ grievance claims asserted in excess of $1 billion,” the oversight board said in a motion filed Tuesday. “Assumption of the CBAs would also be inconsistent with the pension reform measures the Oversight Board has determined are essential to ensure adequate funding for accrued pension benefits. The pension reform measures are the same as those implemented for governmental employees of the Commonwealth and other Title III debtors.”

The AJAEE president asserted that “[o]ur Retirement System has been attacked over the last 10 years by the governments in power until it became completely bankrupt in April 2023.”

“Now to make matters worse, the Fiscal Control Board intends to eliminate it completely,” Rodríguez Ortiz said.

He noted that the process of decapitalization of the PREPA Employee Retirement System began in 2015, when Lisa Donahue, from the company AlixPartners, was hired by PREPA under the administration of then-Gov. Alejandro García Padilla to restructure the debt of the public corporation.

“But what the Fiscal Control Board and Governor Pedro R. Pierluisi Urrutia, who was an advisor to this Board, are doing is completing the process to disappear our Retirement System before the electoral process in Puerto Rico,” the AJAEE president said. “They see everything as a business, regardless of the future of the over 12,000 retirees involved.”

Rodríguez Ortiz insisted that “they have invented eliminating the UTIER Collective Bargaining Agreement, where our pension plan originates, but we retirees from the Electric Power Authority cannot allow this.”

“We made our individual contributions and the System was very well managed, until PREPA stopped paying, failing to comply with the recommendations and all the warnings of the actuaries,” he said. “Everything that happened has been planned in order to destroy something that worked well for more than 70 years and was an example of healthy administration.”

Rodríguez Ortiz said he trusts that the PREPA Employees’ Retirement System board of trustees will do what is appropriate since “it has the fiduciary obligation to defend [the system] to the final consequences.”

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