Imagine that after years of dedicated public service work, your hard-earned pension benefits are now on the verge of being slashed, even when your elected officials try to protect them in law. This is exactly what is at stake for Puerto Rican public sector retirees.
Earlier this summer, the Supervisory and Financial Management Board of Puerto Rico, also known as the “Council” for follow-up members of the government of Puerto Rico. The lawsuit tries to overturn a new local law – the Dignified Retirement Act – designed to protect pensioners and essential services in the debt restructuring deal being considered by the courts. The Council, in taking this step, violates the spirit of the power-sharing agreement that we have established by federal law.
When Congress created the Council through the Law of 2016 known as PROMESA, that did not give it a white card. Specifically, Congress has recognized that the bankruptcy code provisions incorporated into PROMESA cannot be used to violate the exclusive powers of local government to legislate. This is why the recent actions taken by the board of directors in an attempt to impose pension cuts despite opposition from the elected government are so worrying.
The Puerto Rican government is fully within its right under PROMESA to oppose a restructuring plan proposed by the board of directors and explain how it considers its debt must be restructured – a move that will impact Puerto Rico for generations. This is exactly what the government has done through the unanimously adopted Worthy retirement act.
Under PROMESA, the legal framework necessary for the implementation of a restructuring plan must be in place before it can be confirmed by a judge. Therefore, the local government must pass the necessary legislation before the plan can be implemented. Congress specifically sought local input when designing this power-sharing agreement and decided that the elected Puerto Rican government must retain its exclusive power to legislate, including in the context of the debt restructuring process.
The Dignified Retirement Act Describe the conditions that must be met for the government of Puerto Rico to cooperate in the implementation of a debt restructuring plan, including full payment of government pensions and protection of essential government services. The Council, on the other hand, continues to advocate for a debt restructuring plan that would impose a debt restructuring plan. 8.5% discount on any pension payment over $ 1,500 per month received by retired officials.
While the press has paid much attention to the Dignified Retirement Act, the Council may well face an insurmountable hurdle in upholding and implementing its current debt restructuring plan. The Council needs the Puerto Rican government to enact legislation to implement the plan, and the government has made it clear that it will not move forward with the implementation of a restructuring plan that would cut pensions and put people at risk. essential services.
We urge all parties to reach a fair resolution that protects vulnerable retirees who face reduced benefits. The board is not the appointed governor or legislature of Puerto Rico, and it must work with the local legislature to come to a mutually agreed-upon resolution instead of putting retirees at risk.
Nydia VelÃ¡zquez represents New York’s 7th Borough and is chair of the Small Business Committee. JesÃºs âChuyâ GarcÃa represents Illinois’ 4th District and a member of the House Financial Services Committee.