GERS board approves budget, increase to employer contributions to stave off insolvency

ST. CROIX — The Government Employees Retirement System board approved a $22.7 million 2025 budget during its regular meeting on Thursday and took action to stave off future insolvency by authorizing a 3% increase to employer contributions.

Unlike many other government departments and agencies, GERS isn’t required to submit a budget to the Legislature for approval, but Administrator and Chief Executive Officer Angel Dawson Jr. still presented the Senate Finance Committee with an operational update earlier this month. Despite achieving a net positive cash flow in 2023 — for the first time in 29 years — and increasing the value of the system’s assets by 31% over the last two years, Dawson told lawmakers that GERS’s financial position could have been better.

“To be precise, it could have been at least $34 million better had we received the entire amount of the funding note scheduled for fiscal year 2024,” he said at the time. Excise taxes collected on Virgin Islands-made rum that is imported into the continental United States are “covered over” back to the territory. In 2022, lawmakers created a funding mechanism to keep GERS solvent using these funds, but the plan assumed a cover-over rate of $13.25 per proof gallon. That rate expired in 2021, reverting back to $10.50.