Puerto Rico addresses collapsing pension system

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Associated Press

Posted on February 27, 2013 at 3:32 PM

Updated Wednesday, Feb 27 at 3:33 PM

SAN JUAN, Puerto Rico (AP) — Puerto Rico's treasury secretary is proposing what she calls "severe" cost-saving measures designed to help rescue one of the U.S. territory's public pension systems that is on the brink of collapse.

Melba Acosta is calling for increased employee contributions, a higher retirement age and reduced benefits and monthly pensions for certain workers.

Acosta also proposes reducing bonuses and medical plan contributions, but says minimum monthly pensions should rise from $400 to $500. The plan also calls for transferring certain employees from a defined-benefit plan to a hybrid plan that includes a defined contribution component.

The plan will be submitted to legislators this week. Gov. Alejandro Garcia is expected to sign it if lawmakers approve the plan.

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