Puerto Rico Governor Proposes Pension Reform for PREPA, Faces Opposition
San Juan, Puerto Rico – Puerto Rico Governor Ricardo Rosselló Nevares has called for “honest reform” of the Puerto Rico Electric Power Authority (PREPA) pension system, arguing that sustaining underfunded pensions hinders the island’s economic competitiveness, growth, and reconstruction. The proposal, which involves a “structured and equitable cut,” has sparked immediate backlash from labor leaders and officials.
The governor contends that Puerto Ricans should “pay for the light, but not for the darkness of mismanagement,” framing the pension burden as a misallocation of resources diverting funds from essential energy system improvements.He asserted that true reform must “illuminate, not hide; heal, not prolong the decay,” suggesting current practices represent a continuation of past injustices.
The debate centers on how to address PREPA’s pension obligations without further straining the financially distressed utility and its customers. A key point of contention is whether contributions to the pension system constitute a legitimate operating expense or a “hidden tax” embedded in electricity rates.
ICSE lawyer Agrait argued the payments are a standard labor expense, part of PREPA’s income requirement, and were historically funded through employer contributions. However, Emmanuelli countered that reducing pension benefits would be “totally unfair and abusive” to retirees who contributed to the authority and adhered to the system’s terms.
Domenech forcefully rejected the governor’s proposal, signaling a important obstacle to its implementation. The viability of the governor’s plan remains uncertain as stakeholders clash over the future of PREPA’s pension system and its impact on the island’s economic recovery.
