The Government Employees Retirement System’s accumulated funding-note shortfall has reached approximately $116 million after the payment authorized for fiscal year 2027 fell about $4.4 million below the amount due. Administrator Angel Dawson Jr. presented the update during Thursday’s board meeting, which was shortened by power and internet outages.
Correspondence from Public Finance Authority Executive Director Kevin McCurdy advised that a partial debt-service payment of $69,285,335 had been authorized against the $73,661,125 due to GERS. The difference is $4,375,790, adding to approximately $112 million in shortages from prior years.
The September 28 correspondence directed BNY Mellon Trust Company to process the partial payment due October 1. According to the letter read into the record, the unpaid portion remains a debt-service balance owed to the retirement system. Mr. Dawson agreed to circulate the correspondence after trustees requested copies.
The funding note stems from a debt-restructuring effort developed by the Legislature and central government in 2021 and financed in 2022 to help prevent GERS from becoming insolvent. The arrangement used the Matching Fund Special Purpose Securitization Corporation to issue bonds backed by rum cover-over revenues, freeing money to support the pension system.
The financing projections relied on a cover-over rate of $13.25 per proof gallon, but that rate expired at the end of 2021 and reverted to $10.50. President Donald Trump signed legislation on July 4, 2025, permanently restoring the $13.25 rate for distilled spirits brought into the United States beginning January 1, 2026. The provision did not provide retroactive relief for the earlier years.
By October 2025, GERS had warned that accumulated rum-revenue shortages continued to threaten the system’s stability. An effort to raise the employer contribution rate was also blocked when the Legislature required legislative approval before GERS could increase employee or employer contributions.
“The countdown towards insolvency of the GERS in eight years, as forecasted by our actuaries for the years 2033 through 2039, has begun,” Mr. Dawson warned at the time. His October 2025 statement followed the legislative restriction and the continuing revenue gap.
