Fiscal board sues Puerto Rico government over pension laws [View all]

The Financial Oversight and Management Board for Puerto Rico late Monday sued Gov. Pedro Pierluisi Urrutia and government agencies in the U.S. District Court for the District of Puerto Rico to stop the government from implementing and enforcing Joint Resolution 33-2021, Act 80-2020, Act 81-2020 and Act 82-2020 because, the oversight board claims, they would add significant and unaffordable retirement benefits for government employees.

“The acts will reinstate the fiscal mismanagement that existed before PROMESA [the Puerto Rico Oversight, Management and Economic Stability Act] and caused Puerto Rico to incur over $120 billion in unaffordable debt, including $55 billion of unfunded pension obligations,” the suit reads. “Repeating history, the Acts would create billions of dollars in new unfunded defined-benefit pension obligations for the Commonwealth with no viable plan or method to cover the increased costs.”

The government enacted Act 80, Act 81 and Act 82 in August 2020 without sufficient analysis of how much the new retirement benefits would cost and how to pay for the additional costs. The administrations of Pierluisi and his predecessor, former Gov. Wanda Vázquez Garced, both explicitly agreed not to implement the three laws until the government and the oversight board agreed on an affordable implementation plan, the board said.

For over a year, the oversight board said it engaged with the government to explore ways to make the laws affordable.

Read more: https://www.sanjuandailystar.com/post/fiscal-board-sues-pr-gov-t-over-pension-laws