Puerto Rico’s crisis hits retirees
Puerto Rico’s economic crisis has put tremendous stress and uncertainty on its public retirement system. The system has a $40 billion deficit it has to solve. This situation is extremely uncertain because the island says that its public retirement system could dry up within the next year. This is causing elderly citizens to go back into the workforce.
The aging Puerto Rican population could very well end up in poverty. They already have to deal with high taxes, expensive medical bills, and increased utility rates. The former governor had to increase retirement ages, reduce benefits and increase employer/employee contributions in order to help curb the retirement crisis.
Independent audits have shown that the pension system was mishandled and that past governments increased worker benefits without adding money to the system. Things got worse as the number of pensioners grew, their salaries rose, and they lived longer. In fact, 18% of Puerto Rico’s population is 65 and up. Many of them receive social security, as pensions had to be cut by half to all retirees living on the island.
Governor Ricardo Rossello has promised to protect government retirees. He recently approved a law seeking to boost the public pension system with private investment. However, many retirees worry it won’t happen soon enough. The PROMESA board that was enacted by Congress last year to help Puerto Rico’s economic crisis, created many strict reforms regarding pensions. Some formed a nonprofit organization and hired a law firm that represented retirees in Detroit in hopes of pressuring the control board to reconsider pension cuts.
Overall, the elderly citizens who still have some good health are continuing to work jobs in order to pay for the cost of living. Elderly people who do not have good health and cannot work, are in jeopardy of losing their retirement pensions. This unfortunate circumstance has the potential to create a humanitarian crisis.
This struggle will continue for the people of Puerto Rico, and their public retirement system could get worse before it gets better.