Among the many complex issues in Puerto Rico’s dire financial situation—the Island owes a staggering $73 billion in debt—is how to treat the pension obligations owed to the more than 100,000 retirees and 125,000 active members in the Puerto Rico Government Employee’s Retirement System (PRGERS). Hedge fund managers who gambled on Puerto Rico, paying 30 and 40 cents on the dollar in hopes for full dollar value repayment plus interest, will say Puerto Rico should pay them first. Close more schools if you have to (Puerto Rico has already closed 100), layoff more public sector workers if need be (30,000 have already lost their jobs in this economic crisis), or throw seniors who depend on their pensions into poverty; the hedge funds really need their money back.
Rather than taking this path, the U.S. Congress must pass legislation to protect Puerto Rico’s public pensions so we do not throw hundreds of thousands of the island’s residents into poverty upon retirement…