UPDATE 1: 5:33 p.m. ET 4/8/2022: U.S. District Judge Robert Molloy has dismissed with prejudice the U.S. Virgin Islands Government Employees’ Retirement System’s, or GERS’, suit against the government of the Virgin Islands. In an
order today, the judge granted the parties’
joint motion to terminate the consent judgment related to the government’s statutorily required payroll deductions to GERS in light of the recent
enactment of Act 8540.
Act 8540 authorizes the refinancing of the outstanding Matching Fund Revenue bonds and provides for the issuance of a GERS funding note to be deposited into GERS as an in-kind contribution by the government. The law requires that “GERS upon the issuance and delivery of the GERS Funding Note, shall release all pending claims, including all outstanding employer contributions and dismiss all pending litigation against the Government, and that any pending or existing judgments against the Government shall be deemed satisfied,” the parties’ motion explained. This includes the
judgment of $20 million to $25 million previously entered in the GERS case. The parties requested
dismissal of the case to “facilitate the speedy and effective sale of the bonds” after GERS received the funding note.
Original Story 5:32 p.m. UTC on Feb. 24, 2022
USVI Government, GERS File Joint Motion Seeking 90-Day Stay in Federal Lawsuit Proceedings in Light of GERS Funding Law; Mediation in Local Court Case Still Set for March 21
Relevant Document:
Joint Motion to Stay
The U.S. Virgin Islands government and the USVI Government Employees’ Retirement System, or GERS, today filed a joint motion in the U.S. District Court of the Virgin Islands seeking a 90-day stay in the proceedings.
The motion explains that this month’s
enactment of Act 8540 authorizes the refinancing of the outstanding Matching Fund Revenue bonds and provides for the issuance of a GERS funding note to be deposited into GERS as an in-kind contribution by the government. The law requires that “GERS upon the issuance and delivery of the GERS Funding Note, shall release all pending claims, including all outstanding employer contributions and dismiss all pending litigation against the Government, and that any pending or existing judgments against the Government shall be deemed satisfied,” according to the motion.
In light of the funding legislation, the parties ask the court to stay proceedings for 90 days and indicate that once the funding transaction has been completed, the parties will file a joint stipulation of dismissal and joint motion to terminate the consent decree that requires the government to timely remit payments to GERS.
During a USVI Public Finance Authority
board meeting last week, officials said they expect to undertake the refinancing of the MFR debt and issue the GERS funding note by the end of March.
Both the government and GERS acknowledge that there is a
pending judgment in the federal court case of $20 million to $25 million.
GERS has also filed a
local lawsuit against the government asserting that the government payment obligation to GERS includes both a fixed percentage of the payroll of GERS participants and a second “variable contribution … based on the actuarial needs of the GERS to enable it to pay accrued benefits as and when they are due.” Mediation in the case has
been ordered to commence by March 21.
During a GERS
board meeting last month, GERS attorney Kathy Smith told board members GERS is willing to dismiss the federal court action that has largely been adjudicated. However, rather than dismissing the GERS lawsuit in USVI Superior Court, GERS would prefer to sign a consent judgment in the case so that the court would retain jurisdiction and provide an enforcement mechanism should any party fail to comply with the funding agreement.