The economic crisis of Puerto Rico has drained the tax base and led the largest three pension funds to have a 99% funding gap. The government is now responsible for $49 billion in unfunded pension obligations. An aging population means that by 2050, 30% of Puerto Rico's population will be 65+, doubling the current funds needed for pensions. However, the oversight board appointed to restructure Puerto Rico's debt has taken drastic measures like layoffs, benefit cuts, and tax increases. Long term, Puerto Rico must find at least $6 billion to fund future pensions in a way that does not further deteriorate the economic crisis or lead to more migration from the working population.
Health Insurance Premium-Sharing by Employees and Retirees in the Public SectorLuis Taveras EMBA, MS
The cost of health insurance for New York City public employees and retirees has more than doubled in the last ten years, and its continued growth will be a major driver of projected budget gaps. While the total city budget is projected to grow 11 percent from fiscal years 2012 to 2016, health insurance costs will grow by almost 40 percent and comprise 70 percent of the projected budget gap in 2016.
Utah State Representative Ken Ivory has been a leader in the pursuit of fiscal self-reliance in Utah, with regard to both issues—federal fund transfers and land ownership. Ivory was a primary sponsor of the Financial Ready Utah bills, as well as the 2012 Transfer of Public Lands Act, which establishes a framework for the transfer of certain federal lands to the state of Utah in the coming years. Ivory also serves as president of the American Lands Council (www.AmericanLandsCouncil.org), a nonprofit composed of state officials, local governments, businesses, organizations and individuals interested in advancing the cause of local control of land access, land use and land ownership.
Earlier this month, Reason Foundation Director of Government Reform Leonard Gilroy interviewed Rep. Ivory on the rationale behind the Financial Ready Utah bills and the Transfer of Public Lands Act, the history of federal control of western lands, and much more.
Health Insurance Premium-Sharing by Employees and Retirees in the Public SectorLuis Taveras EMBA, MS
The cost of health insurance for New York City public employees and retirees has more than doubled in the last ten years, and its continued growth will be a major driver of projected budget gaps. While the total city budget is projected to grow 11 percent from fiscal years 2012 to 2016, health insurance costs will grow by almost 40 percent and comprise 70 percent of the projected budget gap in 2016.
Utah State Representative Ken Ivory has been a leader in the pursuit of fiscal self-reliance in Utah, with regard to both issues—federal fund transfers and land ownership. Ivory was a primary sponsor of the Financial Ready Utah bills, as well as the 2012 Transfer of Public Lands Act, which establishes a framework for the transfer of certain federal lands to the state of Utah in the coming years. Ivory also serves as president of the American Lands Council (www.AmericanLandsCouncil.org), a nonprofit composed of state officials, local governments, businesses, organizations and individuals interested in advancing the cause of local control of land access, land use and land ownership.
Earlier this month, Reason Foundation Director of Government Reform Leonard Gilroy interviewed Rep. Ivory on the rationale behind the Financial Ready Utah bills and the Transfer of Public Lands Act, the history of federal control of western lands, and much more.
The United States of America is in the midst of an enormous demographic and economic transformation; effects are witnessed through decreased labor force participation, stagnant economic growth, and financially strained government programs. Layered within the demographic change is a system morphed through partisan interests and inequitable assumptions. The country’s social insurance programs perpetuate on guarantees that supporters receive similar benefits as needed. Academics and government officials have warned of the coming population wave for decades, yet little action has been taken to mitigate associated problems.
Safety nets are critical for developed nations to maintain minimum living standards and some forms are sustainable. U.S. social insurance programs are underfunded by $39.698 trillion dollars, net of assets and future tax revenue, if continued under the current structure. The following research is provided to raise awareness of the existing system’s insolvency, generational inequity, and long-term costs in hope of instigating the necessary discussion of realigning economic, fiscal, and social policies onto a sustainable trajectory.
This section of Solutions for America outlines the problems facing America in regards to budget control, high taxes, and excessive spending. It then offers ways to fix Medicare, Medicaid and Social Security.
From 2010—the first full year after the official end of the Great Recession—to 2018, Vermont’s economy, as measured by gross state product, grew at less than one-third the rate of the country’s overall. Vermont’s annual growth rate, after adjusting for inflation, averaged 0.7 percent per year, compared with 2.3 percent for the U.S. That was also slower than Vermont’s own annual growth rate during the previous recovery (2002-07), which was 1.8 percent. From 2017 to 2018 Vermont’s real GSP grew by 1.2 percent.
A presentation on the Louisiana State Budget and its tax giveaways. Shared at the Together Louisiana Statewide Issues Conference on February 15th, 2014.
What Are Taxes And Best Benefits of File Taxes Each Year? 2023 | CIO Women Ma...CIOWomenMagazine
While we primarily consider them once a year during tax season, we deal with them often throughout the year. In addition to the benefits of file taxes on our income, we also have to pay taxes on the things we buy and the property we own. Total annual expenditures in the United States for these things add up to billions of dollars and include everything from Social Security and the military to garbage collection and park maintenance.
My social security presentation covers Kevin Waida's ideas on how to fix the social security problems harming America. Kevin minored in financial planning at the university of Missouri and is well versed in the topic
The United States of America is in the midst of an enormous demographic and economic transformation; effects are witnessed through decreased labor force participation, stagnant economic growth, and financially strained government programs. Layered within the demographic change is a system morphed through partisan interests and inequitable assumptions. The country’s social insurance programs perpetuate on guarantees that supporters receive similar benefits as needed. Academics and government officials have warned of the coming population wave for decades, yet little action has been taken to mitigate associated problems.
Safety nets are critical for developed nations to maintain minimum living standards and some forms are sustainable. U.S. social insurance programs are underfunded by $39.698 trillion dollars, net of assets and future tax revenue, if continued under the current structure. The following research is provided to raise awareness of the existing system’s insolvency, generational inequity, and long-term costs in hope of instigating the necessary discussion of realigning economic, fiscal, and social policies onto a sustainable trajectory.
This section of Solutions for America outlines the problems facing America in regards to budget control, high taxes, and excessive spending. It then offers ways to fix Medicare, Medicaid and Social Security.
From 2010—the first full year after the official end of the Great Recession—to 2018, Vermont’s economy, as measured by gross state product, grew at less than one-third the rate of the country’s overall. Vermont’s annual growth rate, after adjusting for inflation, averaged 0.7 percent per year, compared with 2.3 percent for the U.S. That was also slower than Vermont’s own annual growth rate during the previous recovery (2002-07), which was 1.8 percent. From 2017 to 2018 Vermont’s real GSP grew by 1.2 percent.
A presentation on the Louisiana State Budget and its tax giveaways. Shared at the Together Louisiana Statewide Issues Conference on February 15th, 2014.
What Are Taxes And Best Benefits of File Taxes Each Year? 2023 | CIO Women Ma...CIOWomenMagazine
While we primarily consider them once a year during tax season, we deal with them often throughout the year. In addition to the benefits of file taxes on our income, we also have to pay taxes on the things we buy and the property we own. Total annual expenditures in the United States for these things add up to billions of dollars and include everything from Social Security and the military to garbage collection and park maintenance.
My social security presentation covers Kevin Waida's ideas on how to fix the social security problems harming America. Kevin minored in financial planning at the university of Missouri and is well versed in the topic
Implications of public pension enhancement in CanadaAlex Mazer
Common Wealth co-founder Alex Mazer's presentation on the Ontario Retirement Pension Plan and Canada Pension Plan enhancement to SHARE's Toronto Pension and Investment Governance Course on May 6, 2016.
After the US dollar replaced gold, the US debt became the attention worldwide, thus the demand for the US dollar continued, furthermore the extremely low interest of the dollar. This helped the US government to borrow great amounts of debt as well as kept the creditors pleased. Due to the pandemic, the US economy retrograded because of the tax cut and unproductive rescue spending plan plus surpassing spending of the government. The rising inflation starts to increase to high levels, which certainly the government must cut back spending or its patterns, while this will lead to uncertain consequences for the long future. This paper discusses several different perspectives on the US government's sustainability as its ability to settle the debt in future, the fate of growth burdened with that debt through the neoclassical mode of growth, and also the effect of anxiety of defaults and unfunded obligations. Inversely, it explores the strength of the dollar with a low-interest rate and its sustainability worldwide. We also propose ways helping of strengthen the fiscal government position and solutions to help the economy recover in long term and to easiest the situation. In the synopsis, we propose something that could affect and shake the global market.
We are facing some very difficult budget choices and challenges for Massachusetts for Fiscal Year 2011 (July 2010 - July 2011). Governor Patrick and his administration are holding a series of hearings and forums around the state to get input and ideas from citizens where this presentation is included. To learn more about the hearings and forums, visit www.mass.gov/governor/forums
If you weren't able to make a hearing or forum or want to be prepared before you attend one, this presentation is about 9 minutes long and will give you a basic overview of the budget situation. Please review it, then visit our blog at www.mass.gov/blog/engage to comment and share your ideas.
Gary Trennepohl on "Financial Markets in 2011," during Reynolds Business Journalism Week, Jan. 7, 2011.
For more information, please visit businessjournalism.org.
The truth about the deficit of the public accounts of brazil and the reform o...Fernando Alcoforado
The Social Security reform has been placed by the Bolsonaro government as the solution for the deficit of the public accounts that is estimated at R$ 139 billion in the budget of 2019. It is a sham that is sold to the Brazilian population, because this deficit and those that occurred in 2015, 2016, 2017 and 2018 were fundamentally the result of the recessive crisis that led to the fall of Brazil's economic growth since 2014 and contributed to the reduction of tax revenues, of the excessive burden of the federal government with the payment of ever increasing public debt, and also the huge debt of large companies to Social Security.
Defining Target Market for Telemarketing CampaignsMelody Ucros
IE Business School MBD Program
Retail Analytics Project O1 Group C:
Annie Pi – Anchal Jaiswal – Cedric Viret – Melody Ucros – Miguel Martin Romero – Pablo Dosal - Victor Kausch
IE Business School Masters in Big Data and Business Analytics
Digital Analytics Project by Group F:
Melody Ucros
Jina Kim
Andrea Blasioli
Adedeji Rodemade
Fergus Buckey
Alex Kyalo
Louis Rampignon
Using Regression for Identifying Opportunities in Real EstateMelody Ucros
Machine Learning Project by Group E
* disclaimer:
The professor later told us that there were some improvements or missing details that should have been added to the regression analysis. But, this was our initial deliverable.
Customer Segmentation for Retention StrategyMelody Ucros
IE Business School
Marketing Intelligence Project by Group F:
Melody Ucros
Jina Kim
Andrea Blasioli
Adedeji Rodemade
Fergus Buckey
Alex Kyalo
Louis Rampignon
Data Source: http://archive.ics.uci.edu/ml/datasets/online+retail
Understanding The Future of Production (4IR)Melody Ucros
Differing trajectories in production will play themselves out, based on the complex and volatile external environment. Here are four contrasting scenarios. (Created For: Economic Environment Course @ IE Business School)
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What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
1. P U E R T O R I C O ' S
A G I N G
P O P U L A T I O N
IEBusinessSchool
EconomicEnvironmentII
MELODY UCROS
P R O P O S E D B Y
July24,2017
ForUSAGovernment
T H E U N F U N D E D
P E N S I O N S Y S T E M
2. Puerto Rico was recently projected to be among the world’s 25 oldest
countries by 2050, with a median age of 51. (USCensusBureau, 2013)
This is mainly driven by its current dependency ratio of 51.3 % in a
population of 3,671,421. (CountryMeters, 2017) Considering that the
Government is Puerto Rico’s largest employer, it needs to tackle
issues relating from a higher dependency ratio, since it translates into an
increased financial pressure to serve its retired citizens.
(HispanicFederation, 2015) It will require an increase in government
spending and, as an effort to create additional revenues, an increase in
taxes for the working citizens. This increase in taxes will reduce the
working citizen’s disposable income, and hence have a negative impact
on the economic growth of the island.
Puerto Rico’s economy though isn’t in good conditions. Over the past
years, Puerto Rico’s high migration, low labor participation rate, high
unemployment, high cost of living, declining median income, 45%
poverty rate, and $72 billion “unpayable debt” has forced its economy
into contraction. (HispanicFederation, 2015) This figure doesn’t include
the $49 billion in unfunded pension obligations. (NYTimes, 2017)
PuertoRico's Aging Population and
Political Context
Executive Summary
The island officially declared Title III bankruptcy on May 1, 2017. Although unqualified to do so under
USA Chapter 9 Law, under the Puerto Rico Oversight, Management and Economic Stability Act
(PROMESA), Obama assigned an unelected 7-person Oversight Board that can override Puerto
Rico’s laws and elected officials with the purpose of restructuring the island's debt, renegotiating with
creditors, and presenting a Debt Adjustment Plan to the US Supreme Court. (HispanicFederation, 2015)
This oversight board has already forced the Puerto Rican Government to lay off over 30,000 employees,
raise utility and college tuition prices, raise taxes, cut public health and pension benefits, close schools,
and raise the retirement age. (HispanicFederation, 2015) Regardless of these efforts, Puerto Rico’s
biggest pension funds, including the Employee Retirement System (ERS), is expected to run out of
cash by the end of 2019. At $1 billion a year, retirement benefits would cost the island around 11
percent of annual revenue, an unsustainable burden when combined with the 36 percent of revenue
now going toward paying bondholders. (Reuters, 2016) Average annual pension benefits are $14,000,
according to Puerto Rico’s federal oversight board, and roughly one-third of employees are ineligible
for Social Security benefits. Nearly half of island residents live in poverty and the median household
income is $19,350, compared with $53,889 in the 50 states. (Bloomberg, 2017) Therefore, before all
retirees officially live in poverty, it is empirical for Puerto Rico to find a long-term and sustainable
solution for its Pension System. To do so, it needs the help of the American Government.
The economic crisis of Puerto
Rico has drained the tax base, and
led the largest three pension funds
to a 99% funding gap. The
government is now responsible for
49 billion in unfunded pension
obligations. The oversight board
assigned to restructure the debt
has taken drastic measures to
reduce cost and pay bond holders.
The problem is that PuertoRico is
expected to be among the oldest
countries in the world in 2050.
Therefore, the domestic and
federal government must work
together to find a long-term
solution that guarantees there are
sufficient pension funds for the
next generation.
3. How is Puerto Rico’s Pension
System designed?
Puerto Rico’s Public Pension System, is based on statutory trusts created to provide pension and
other post-employment benefits to former employees of the commonwealth itself, as well as to
former employees of more than 200 other governmental employers, including central government
agencies, as well as public corporations and municipalities. Aside from the proceeds of bond
issuances, these funds are funded primarily by contributions from participating employers and
participating employees. (Law360, 2017) The problem is that the total pension liability is almost
11x the annual payroll of active employees contributing to the plans. (SeekingAlpha, 2017)
Statutory trust are formed as private governing agreements under which either (1) assets are held,
managed, administered, invested and/or operated; or (2) business or professional activities for profit
are carried on by one or more trustees for the benefit of the trustor entitled to a beneficial interest in
the trust property. In other words, fully funded pension systems require that the individual’s
contributions are invested into a fund. The returns to this investment are capitalized, which
provides the individual with an amount (a stock) that he or she can collect at the age of, say, 65. The
other option is to convert this amount into an annuity (a flow), and obtain a flow of pension benefits
each month. The conversion from stock to flow typically depends on the individual’s life
expectancy. (CAIRN, 2011).
The 96% shortfall between assets held and payout liabilities, has forced them to rapidly liquidate
assets. Absent permanent fix, the responsibility to cover benefits shifted to the Puerto Rican
government, creating a pay-as-you-go system funded mostly by taxpayers.
In a PAYG system, individuals do not invest their pension contributions in a fund. Each
contribution to the pension system is used to pay the pension benefits of current retirees. Then, as
time passes, the ones who were paying become the ones who receive a benefit, paid by the new
generation of “youths”, and so on generation after generation. In that system, both the contribution
and the benefit are defined by the government, who clearly has an electoral incentive to propose
low contributions (taxes) but high benefits. The difference between the total amount of benefits and
the total amount of contributions adds to the public deficit. (CAIRN, 2011)
Puerto Rico's government is committed to allocate $2 billion out of its 9.6 billion budget to make
sure the retirees get paid. As a result, what was once the solution is now a key piece of a historic
economic crisis. Puerto Rico's three largest pensions having roughly a 99 percent funding gap,
the biggest in history for a U.S. state-level retirement system. (Reuters, 2016)
4. How is policy regarding the
Pension System implemented?
Unlike in some states, the rate Puerto Rico contributes to its pensions is set by statute, rather than
the recommendation of actuaries, and requires legislation to change. This makes pension
contributions a political issue. There were two legal mechanisms available to the commonwealth
government to reform its public pension systems — namely, legislative action, or implementation
of reforms through one or more Title III proceedings under PROMESA.
When Puerto Rico officially opted for declaring Title III bankruptcy, it was the same as a Chapter
9 proceeding in the mainland, but with one notable exception. The bill says that any approved
fiscal plan must, inter alia, “provide adequate funding for public pension systems” and in turn
provides that any approved plan of adjustment must be “consistent with the applicable Fiscal Plan
certified by the Oversight Board.”. Notwithstanding that PROMESA states that “there shall be
no jurisdiction in any United States district court to review challenges to the Oversight Board’s
certification determinations under this Act.” (Law360, 2017)
To implement a reform related to the pension system, the government of Puerto Rico must agree
on a solution, through normal policy procedures, and present it to the board. Then, they will
decide whether it is “adequate” in terms of the Fiscal Budget.
There is no definition of the word “adequate” which makes decisions extremely subjective, and the
Puerto Rican government can’t do anything about it. In other words, these seven people are entirely
responsible for the well-being of the 65+ year olds who currently represent 15% of Puerto Rico’s
current population. (CountryMeters, 2017) The only way to implement a policy successfully is to
prove to them that this solution won’t affect the island’s ability to repay creditors.
If productivity was stable across generations, the return of a PAYG system can be
approximated by the growth rate of the population: if each adult breeds n children, then each
child paying out 1$ of contribution produces n$ of pension benefit per adult. The issue is that
these dynamics have now reversed: baby boomers are retiring, life-expectancy has risen, and
productivity growth has slowed down. The consequence is that n is falling below 1. This puts a
lot of pressure on the system, and deepens the public deficit, unless contributions are increased
and/or benefits are reduced. In other words, the younger one retires, the lower is the value of
past contributions and the lower is the conversion of these contributions into a monthly
pension benefit. (CAIRN, 2011)
5. What does an aging population mean
for PuertoRico’s Pension System?
In 2016, the natural increase was positive, as the number of births exceeded the number of deaths by
15, 344. (Reuters, 2016) Yet, when looking at the population pyramid, Puerto Rico has a stationary
type. Countries with such type of pyramid usually have declining birth rate and relatively low death
rate. In the island, total life expectancy at birth is 78.9 years, and birthrate is only 1.43 births per
woman. Puerto Rico must pay attention to its aging population, because they require a lot more
financial help from government to satisfy their medical needs and basic social services.
Puerto Rico has a caped social security system that provides benefits to only 445,673 of Puerto Rico’s
retired workers, half (52.9 percent) of the total beneficiaries of the system. The typical social security
benefit received by a retired worker in Puerto Rico was $9,888 in 2015. (SSWorks, 2016) An aging
population means that Puerto Rico will soon be responsible for the well-being of more than 30%
of its population, and that the pension system is the only source of funds to fulfill that need. This
would double the current funds needed, and as the economic crisis gets worse and the cost of living
raises, the current monthly payments won’t be “adequate” anymore.
The social security and pension funds are the only thing lifting retirees from extreme poverty.
Therefore, Puerto Rico must find at least 6 Billion to fund pensions in the future. Simultaneously, it
must find a way to save money from current employee contributions, since as of now they are paying
for something that they will never receive benefits from. Because Puerto Ricans can simply migrate to
the mainland and qualify for “proper” service and funds, extreme poverty from the retirees will lead to
an even higher increase in migration from the working population as an effort to secure their future.
An outmigration from the working population means that there will be less kids being born in the
island, less consumption, less economic productivity, less educated people, and a collapsing system
with too little “contributions” to support the people who stay in the island.
As previously mentioned, roughly one-third of employees are ineligible for Social Security benefits.
Hence, pensions are their only source of income. Puerto Rico’s average public pension is roughly
$1,100 a month, but more than 38,000 retired government employees get only $500 because of the
type of job they had and the number of years worked. (SeattleTimes, 2017) More than half of their
paycheck is spent on medical bills, which makes them even more reliant on the working population,
their sons and daughters, to have a standard quality of life.
Why is the Pension System
important for the 65+ population?
6. What impact does the economic crisis
have on Puerto Rico’s Pension System?
Setting the stage for the crisis were stagnant economic conditions in Puerto Rico over the past 10-15
years, brought about by the elimination of Section 936 of the Internal Revenue Code. Section 936
encouraged mainland companies to locate on the island. Unfortunately, when the tax breaks were
eliminated by Congress, these companies moved out. The Great Recession of 2008 compounded this
stagnation and led hundreds of thousands of Puerto Ricans to migrate in search of economic
opportunity, draining the island’s tax base which funds basic public services. (HispanicFederation,
2015) Declining tax revenue has forced successive Puerto Rican governments to keep borrowing
to keep public utilities and local government running. Hedge funds looking for fiscal windfalls
have been happy to oblige on extending huge loans with predatory interest rates to the Puerto Rican
government. These same hedge fund interests were backers of changes in the island’s constitution that
mandated the local government to first pay debt relief before continuing to fund schools, energy and
other vital public services. (HispanicFederation, 2015) This economic crisis means that Puerto Rico
has no money to fund its current or future pension liabilities. It has made the island unqualified to
issue new debt, negotiate with bondholders of its pension systems, ask for additional employee
contributions, and attract new employer contributors.
This economic crisis has put the island in a difficult position domestically, but the crisis goes beyond
its borders. Its diaspora – five million strong, still intimately connected to the island – are a visible
presence in communities throughout the fifty States of the Union. Just as significantly, three out of
every four municipal funds in the mainland holds Puerto Rico’s bonds. This means that if the
system collapses, almost every state will be affected as well. (HispanicFederation, 2015)
Currently, the 50+ generation has the largest buying power, responsible for 61% of consumer
purchases in Puerto Rico, or $20.7 billion. Of the 14 consumer categories identified in the study, 13
were significantly dominated by this age group, including healthcare, utilities and
telecommunications. The older this generation gets, the more reliant the economy will be in the new
generation. The problem is that the new generation won’t have the same access to funds from
government by the time they reach 50+. Therefore, it can be predicted that Puerto Rico’s economy
shouldn’t expect growth any time soon. The repercussions are already being seen. More island
residents have migrated to the U.S. mainland in the last 5 years than at any time since the Great
Puerto Rican Migration after World War II. At the same time, one hundred and fifty public schools
on the island have been shuttered during that period. Yet economists argue that Puerto Rico cannot
“cut and tax” its way out of the crisis; the debt cannot be made sustainable without growth.
7. Amidst its economic crisis, how might
Puerto Rico serve the 30% of the population
that people 65+ will represent by 2050?
Puerto Rico already increased its retirement age from 55 to 65. The plan drafted by the
government and approved by the board will also cap some Medicaid benefits, effectively raise
property taxes and scrap some infrastructure projects while possibly turning ferries, ports and
parking lots over to private companies. It will freeze salaries until 2020, seeks to privatize the
generation of power and increase motor vehicle license fees by 10 percent. It also will lead to more
than $300 million in cuts at Puerto Rico's largest public university and a tax increase on tobacco
products. (USNews, 2017)
Many believe the measures in the fiscal plan will provoke a further exodus from Puerto Ricans.
Those who remain have faced new taxes, higher utility bills and a 12 percent unemployment rate on
an island where food is 22 percent more expensive than the U.S. mainland and public services
are 64 percent more expensive. (USNews, 2017)
The economic crisis has also made citizens more resistant to change regarding their pension systems.
Most if these funds have appealed to court, and retiree representatives have attempted to persuade
government to make pensions a priority. Although allocations have been made, it is simply not
enough for the growing population of concerned individuals.
Under the Obama Administration, the assistance to the island was a bit more generous, attempting
to ensure the wellbeing of the millions of American citizens who live on the island. Under the
Trump administration, there is no hope in getting additional federal assistance to alleviate the
financial crisis that Puerto Rico is going through. This new administration puts full responsibility on
the hands of the Puerto Rican government, in a selfish attempt to argue that “American Taxpayers”
shouldn’t have to fund the Island’s crisis. What it fails to realize is that part of this burden was
created by the federal policies like the Jones Act, which puts a burdensome cost of transporting
goods in and out of the island, and the federal obligation to offer services that the island can’t
afford and doesn’t qualify to get sufficient funding for.
In the mid of economic crisis, because the pension system is a political issue, politicians and the
oversight board are opting for cutting every source of cost possible from the younger generation,
including schools, in attempt to allocate “adequate” funds for the retirees and pay back the creditors.
Puerto Rico can expect this problem to go beyond 2030, when the economy is projected to start a
trend of recovery. (DDEC, 2016)
8. These measures are intended to create considerable savings in funding, but not enough to make the
pension system a sustainable one. The only remaining solutions for Puerto Rico’s crisis and
financial pressure of the pension system, is to create more sources of revenue. They can do this
by incentivizing the migration back to the island, improving financial stability of the working
population, and at the same time, assisting the population of 65+ to remain productive for as long as
possible.
Without money though, Puerto Rico can't implement many of the initiatives that would stimulate the
economy and guarantee the wellbeing of its aging populations. It needs federal support to move
forward and find sufficient funds for its pension system.
As explained before, the return of a PAYG system can be approximated by the growth rate of
the population. Therefore, Puerto Rico is not asking for cash, but for investment into the other
american citizens who live on the island.
1. We ask for equal treatment in terms of healthcare benefits and social security as the mainland. By
making our population less reliant on the pension system to live a standard quality of life, we can
lower the contribution from the existing workforce. Less contribution would increase their disposable
income, and hence allow the government to collect funds but as tax revenues.
2. We ask that USA embraces its "ownership" of Puerto Rico and enhances the trade cost structure.
By assisting Puerto Rico in lowering the cost of living, the aging population and future generations
will need less government assistance and monthly benefits.
3. We ask that USA exploits the tourism potential of the island. In collaboration with the local
government, we ask for an investment into infrastructure in cities and attractions that bring people to
the island. Puerto Ricans pay the same taxes as Americans in the mainland, therefore, driving money
to the island will do no harm to the American Government. In the contrary, it will relieve the debt
burden associated with simply funding the island. Hopefully, this would also inspire more people to
move into the island, increasing the tax base.
4. We ask USA to support the future generation by making sure the schools stay open. Hundreds of
schools are being closed, and the university system unfunded. If the next generation feels like they
aren't supported, the future tax base will drain even more. The system is already unfunded, help us
keep the people in the island.
9. APPENDIX
Exhibit 1: Puerto Rico Among the Oldest Countries in the World
Exhibit 2: Puerto Rico's median age projections
10. Exhibit 3: Puerto Rico's Pension Fund Gap
Exhibit 4: Puerto Rico's Trend of Labor Participation Rate
APPENDIX II
11. Exhibit 5: Comparison of Puerto Rico's Financial Stats with USA
Exhibit 6: Baseline Economic Scenario as projected by the Puerto Rican Government
APPENDIX III
12. References
US Census Bureau (2016) "An Aging World Report". Retrieved from:
https://www.census.gov/content/dam/Census/library/publications/2016/demo/p95-16-1.pdf
The New York Times (2017). "Puerto Rico Declares a Form of Bankruptcy." Retrieved from:
https://www.nytimes.com/2017/05/03/business/dealbook/puerto-rico-debt.html
Reuters (2016) "Puerto Rico's Impoverished Pensions Complicate Island's Debt Crisis." Retrieved from:
http://www.reuters.com/investigates/special-report/usa-puertorico-pensions/
Reuters (2017) "Puerto Rico Budget to Protect Pension Payments: Governor."Retrieved
from: http://www.reuters.com/article/us-puertorico-debt-budget-idUSKBN18R3C8
CountryMeters (2017) "Puerto Rico Population." Retrieved from:
http://countrymeters.info/en/Puerto_Rico#population_2017
Hispanic Federation (2015) "Puerto Rico's Economic Crisis." Retrieved from:
http://www.nprdpinc.org/wp-content/uploads/2016/03/puertoricoeconomiccrisispolicy2015.pdf
Law 360 (2017) "Disarming Puerto Rico’s Pension Time Bomb" Retrieved from:
https://www.clearygottlieb.com/~/media/cgsh/files/other-pdfs/disarming-puerto-ricos-pension-time-bomb.pdf
Seeking Alpha (2017) "Puerto Rico's Pensions Reach Pay-As-You-Go Status." Retrieved
from: https://seekingalpha.com/article/4037197-puerto-ricos-pensions-reach-pay-go-status
Bloomberg (2017) "Hedge Funds Vie With Puerto Rico Workers Over Getting Paid First." Retrieved
from: https://www.bloomberg.com/news/articles/2017-05-12/hedge-funds-vie-with-puerto-rico-workers-over-
getting-paid-first
Social Security Works (2016) "Social Security Works for Puerto Rico." Retrieved
from: http://www.socialsecurityworks.org/wp-content/uploads/2016/08/PR2016.pdf
DDEC (2016) "Economic Study of Puerto Rico 2016-2030." Retrieved from: http://ddec.pr.gov/es/blog/wp-
content/uploads/2016/12/Estudio-economico-2016-2030.pdf
CAIRN (2011) "Which reforms for a fair & sustainable pension system?" Retrieved from:
https://www.cairn.info/revue-reflets-et-perspectives-de-la-vie-economique-2011-3-page-187.htm