What is the Benefits Council?
The Benefits Council is a nonprofit corporation created by the Guidelines to ensure that the Government of Puerto Rico complies with the requirements regarding funding and withdrawal from the Pension Reserve Fund (The Pension Reserve) established to help meet pension payments. It has nine (9) members, of which (6) are elected (five 5 are retirees, and one 1 is an active employee) for a 4-year term. Of the other three members: one is appointed by the Association of Federal State County and Municipal Employees (AFSCME)/Servidores Públicos Unidos (SPU), one by the Governor of Puerto Rico, and one by the Fiscal Oversight Board (FOMB). When the FOMB ceases to exist, the Governor will appoint two (2) members.
The Benefits Council will exist for up to 30 natural days after the date on which the Pension Reserve’s funds have been completely withdrawn, or when pension benefits to the beneficiaries of The Pension Reserve have been paid in full, whichever occurs first. Therefore, it is expected that the Benefits Council will exist for several decades.
What functions does the Benefits Council serve?
- Monitor and ensure that the Government of Puerto Rico meets the requirements established in the Guidelines concerning deposits and the conditions for withdrawing funds from THE PENSION RESERVE to pay for pensions.
- Receive regular reports from the Investment Board.
- Appoint two of the five members of the Investment Board every six years in accordance with the requirements established by the Guidelines. When the Financial Oversight and Management Board (FOMB) ceases to exist, the Benefits Council will then name three of the five members.
- It has the faculty to demand enforcement of the Guidelines at U.S. District Court for the District of Puerto Rico.
Who is eligible to be a member of the Benefits Council?
All members of the Benefits Council must be beneficiaries of THE PENSION RESERVE and must be residents of Puerto Rico, except those appointed by the Governor, the Financial Oversight Board, and AFSCME/SPU. Beneficiaries of retirees who are benefiting from THE PENSION RESERVE, and people who are also members of the Retirement System Board under Act 106-2017, are not eligible.
In addition, anyone who is elected to the Benefits Council must meet the following requirements established in the guidelines:
- Section 2.1 B “Eligibility: Each Pension Benefits Council Member, other than the appointees of the Governor, the Oversight Board, and AFSCME, must be a Pension Reserve Trust Participant, as described above, and individuals who are solely beneficiaries of such participants cannot be members of the Pension Benefits Council. Members of the Pension Benefits Council, other than the appointees of the Oversight Board and AFSCME, must be residents of Puerto Rico. Members of the Pension Benefits Council cannot concurrently be members of the Act 106 Board. In addition, each person seeking to be elected to the Pension Benefits Council must comply with the requirements set forth in Section 2.3 (C) below.”
- Section 2.3 C “Members of the Pension Benefits Council may be a candidate for re-election; provided, however, that members who have served two consecutive terms (with service during the Transitional Period not qualifying as a term for purposes of this provision) may not be a candidate in the election immediately following their second term; provided further, however, that such member may be a candidate in any subsequent election (subject to a new two-consecutive-term limitation).”
Share your questions regarding THE PENSION RESERVE with the Transitional Council, so that we can help you in any way possible.