Government searching for 'pockets of funding' for GERS

The Board of Trustees for the Government Employees Retirement System is still urging the government to help cover the pension fund’s administrative expenses and find funding for a 3% increase in employer contributions, in an effort to stave off insolvency.

In his report to fellow board members at a meeting Thursday, Chairman Dwane Callwood said GERS representatives met with Gov. Albert Bryan Jr. and his financial team on Oct. 2 to emphasize the necessity of finding additional cash. “We just reiterated that the system is still about 10% funded,” and despite the cashflows expected from a special purpose vehicle funded through the rum cover-over, “there is still potential for the system to be insolvent somewhere around 2037, 2038,” Callwood said. “The governor and his team indicated that they were looking into some additional pockets of funding.”

The funding mechanism intended to save GERS assumed revenue from a rum cover-over rate of $13.25 per proof gallon, which expired in December 2021. Congress has failed to act to extend the higher rate, and the current rate of $10.50 is insufficient to fully fund the plan, causing anxiety for GERS officials. Trustee Andre Dorsey said the board voted last month to increase employer contributions by 3% “so we don’t go back down that road of insolvency,” and the governor should ask the Legislature to fund the $15 million in annual administrative costs.