BREAKING: PROMESA Oversight Board Reaches Resolution With Government Parties on 2020 Pension Laws Adversary Complaint

Relevant Document:
Stipulation

The PROMESA oversight board has just filed a stipulation and proposed order resolving its complaint brought against several commonwealth representatives regarding the "2020 Pension laws" and Joint Resolution 33. The oversight board indicated in a Dec. 24 filing that it had been engaged in negotiations with an aim of resolving the dispute. The stipulation states that the parties have agreed to resolve the adversary proceeding as follows:

• Act 81: "The parties shall endeavor to reach an agreement, within 60 days of the date of this agreement on a means to provide enhanced retirement benefits to police officers consistent with the Commonwealth’s certified fiscal plan and currently proposed plan of adjustment. If the parties reach an agreement, the Oversight Board shall provide the necessary fiscal plan and budgetary approvals or certifications required by PROMESA."


• Act 82: "The parties shall endeavor to reach an agreement, within 120 days of the date of this agreement on possible alternatives, consistent with the certified fiscal plan and proposed plan of adjustment, to provide an enhanced compensation package for teachers with the goal of improving public education."


• Act 80 and JR 33: "The parties shall endeavor to reach an agreement on a means of implementing the incentivized early retirement provisions set forth in Act 80 for certain employees where doing so would create savings above and beyond the level of savings required in the currently certified fiscal plan (the 'Baseline Savings') or otherwise satisfy some other metric the parties agree on, as follows:


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  • On a per agency level, the Government shall provide both the descriptions of the position proposed to be eliminated (the “Proposed Eliminated Positions”) and the projected net savings that will result from the elimination of said position while taking into consideration the incremental cost of providing the incentivized early retirement benefit (the “Savings”);
  
  
  • If the parties mutually agree on (i) the Proposed Eliminated Positions, (ii) the Savings, and (iii) that the Savings are above and beyond the Baseline Savings, or otherwise satisfy some other metric the parties may agree on, then the parties shall use their respective best efforts to concur on a means of implementation within 45 days after the date of this agreement, including necessary fiscal plan and budgetary funding in compliance with PROMESA; and
  
  
  • The Eliminated Positions shall be eliminated within the Governmental system, and the eliminated positions, including any functionally similar positions, shall not be restored, recreated, or created within the affected agencies and corporations."
  
  
  
  

The stipulation adds that "The Court’s approval or ‘SO ORDERING’ of this agreement shall invalidate JR 33 and Acts 80, 81, and 82 pursuant to PROMESA, including as significantly inconsistent with the certified fiscal plan, as of the enactment date for each of JR 33 and Acts 80, 81, and 82, except as provided for in paragraph 3 of this agreement. Upon Title III Court approval or ‘SO ORDERING’ of this agreement, the Oversight Board’s complaint shall be dismissed with prejudice."