In a letter addressed to Governor Pedro Pierluisi and Puerto Rico's legislative leaders, the Financial Oversight and Management Board (FOMB) again gave its position on House Bill 1003 that creates the legal framework to restructure Puerto Rico's debt, but this time it gave in and committed to eliminating pension cuts for public retirees from the proposed Plan of Adjustment (POA).
Although the Board reminded the governor, Senate President José Luis Dalmau and House Speaker Rafael “Tatito” Hernández that the bill “would make the Plan unaffordable for Puerto Rico,” the FOMB said that it has nothing against the philosophy behind it.
"The Oversight Board has no philosophical disagreement with the laudable political aspirations of the bill," the FOMB said in its letter sent today.
The Board said it has "a deep-rooted interest in the well-being of retirees" and that it "does not want to cut pensions and, in fact, has already agreed revisions to the Plan that would eliminate any cut in pensions to more than 85% of retirees.”
"However, the language of the pension bill goes far beyond simply eliminating the remaining modest pension cuts and, in doing so, increases the risk that the Plan will not be ultimately confirmable or affordable," according to the Board.
But since the Legislature and the governor "have made it clear that they want to take that risk on behalf of the residents of Puerto Rico," the FOMB has agreed not to touch public pensions.