US Virgin Islands Pension Fund Short $4.4M on Latest Payment

The Government Employees Retirement System faces a combined shortfall of approximately $116 million, after the Public Finance Authority approved only a partial payment toward the amount owed for fiscal year 2027, GERS Administrator Angel Dawson Jr. reported to the board on Thursday.

The authority authorized $69.3 million in debt-service funds against $73.7 million due to the pension system, leaving a gap of $4.4 million for that fiscal year alone. This latest underpayment adds to roughly $112 million in unpaid balances accumulated over prior years, according to a letter from Public Finance Authority Executive Director Kevin McCurdy that was read into the board record.

The funding crisis traces back to a 2021 restructuring plan that issued bonds secured by revenues from the federal rum cover-over tax on spirits imported into the United States. The plan assumed a tax rate of $13.25 per proof gallon, but that rate lapsed at the end of 2021 and fell to $10.50.

On July 4, 2025, President Donald Trump signed legislation that restored the $13.25 rate permanently, effective January 1, 2026. The new law did not, however, compensate the system for the shortfall during the years when the lower rate applied.

By October 2025, GERS warned that the ongoing revenue gap threatened the system's solvency. Dawson cautioned at that time that "the countdown towards insolvency of the GERS in eight years, as forecasted by our actuaries for the years 2033 through 2039, has begun." He also noted that efforts to raise contribution rates from employers and workers had stalled after the Legislature required its own approval before GERS could implement any increase.