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Senators Doing Better Than Everyone Else in Current GERS

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Dec. 5, 2006 — Apparently, this proposed GERS legislation is meant to eliminate the purportedly unfair treatment of senators in the existing system. However, this description of the existing system is simply inaccurate.
Presently, a standard government employee (Standard) must be 50 and serve 10 years to retire. A Standards retirement benefit is 2.5 percent (of the average of the 5 highest paid years during the last decade of work) for each service year up to 100 percent (40 years), capped at $65,000 per year.
However, if a Standard retires before age 60, he loses 0.325 percent for each month or portion thereof between his age and age 60. Accordingly, a Standard who retires at 50 must pay a penalty of 39 percent (0.325 percent x 120 months), but if he only served 10 years, he pays that 39 percent penalty on just 25 percent in benefits (2.5 percent x 10 years) and receives nothing. For a Standard to receive benefits at 50, he must serve 16 years — and even then the benefit will be just $650 per year.
In order to avoid this penalty, a Standard must not retire early or must serve 30 years. 3 V.I. Code

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