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AFSCME Sues Puerto Rico to Stop Betrayal of Public Service Workers

Even as public service workers in Puerto Rico made sacrifices, their government was betraying them. This week, AFSCME and AFT sued the government, alleging mismanagement of pension funds.
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By AFSCME Staff ·

Working families in Puerto Rico have been through a lot in recent years. The country’s fiscal crisis was an economic disaster on the scale of Detroit’s bankruptcy, one that left many families scraping for sustenance. Last year’s Hurricane Maria and the Trump administration’s incredibly apathetic response to the suffering on the island were added blows to the U.S. commonwealth.

Public service workers in Puerto Rico, from teachers to human service workers to public safety officers, have made plenty of sacrifices for their communities. They took pay cuts and benefit reductions even as they continued to serve with pride.

But even as they made sacrifices, their government was betraying them.

This week, AFSCME and the American Federation of Teachers (AFT), the two unions representing teachers and other public service workers in Puerto Rico, sued the government following its apparent mismanagement since July 2017 of more than $300 million in pension contributions from public service workers.

AFSCME President Lee Saunders called the government’s mismanagement of public service workers’ hard-earned money “a shameless attack on their freedom to retire with dignity.”

“Without workers’ consent, the commonwealth handed their hard-earned money over to a bank chosen by government officials when the money should have been properly invested so that Puerto Rico’s working families could amass retirement savings,” Saunders said.

“Puerto Rico’s teachers, human service workers, public safety officers and thousands of others step up every day to make their communities safer and stronger,” he added.  “For all the sacrifices they have made, and austerity measures imposed upon them, they deserve better than this betrayal. They deserve retirement security and basic respect.”

Annette González, president of Servidores Públicos Unidos (SPU), AFSCME Council 95, said the workers’ rights “are being trampled by the government, (which) has flagrantly violated this law and its responsibility in handling money that doesn’t belong to it.”

By the commonwealth’s own admission, it has failed to create and administer Law 106’s promised defined-contribution accounts – commonly known as 401 (k) and 403 (b) accounts – and instead has taken hundreds of millions of dollars of employee pension contributions and stashed more than $300 million in government accounts at Banco Popular that earn virtually zero interest.

According to the lawsuit, the commonwealth has been aided and abetted in violating the law by the Financial Oversight and Management Board and Banco Popular. As a result, thousands of public servants have been deprived of millions of dollars in interest and investment income that they should have been earning over the past year.

The lawsuit seeks an undetermined amount of compensation for lost investment income. 

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