Puerto Rico Governorโ Proposes Pension Reform for PREPA, Facesโฃ Opposition
San Juan, โฃPuerto Rico – โคPuerto Rico โGovernor Ricardo Rossellรณ Nevares has called โfor “honest reform” of the Puerto โขRico Electric Power Authorityโ (PREPA) pension system, arguing that sustaining underfunded pensions hinders theโค island’s economic competitiveness,โ growth, and reconstruction. The proposal, which involves a “structured and equitable cut,” hasโ sparkedโค 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, โฃnot โprolong the decay,” โsuggesting current practices represent a continuation of past injustices.
Theโข debate centers โon how to address โขPREPA’s pension obligations withoutโ further straining the financially distressed utility and its customers.โข A key point โof contention is whether contributions to the pension system constitute a legitimate operating expense or โa “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 โemployer contributions. However, Emmanuelli countered that reducing pension benefits would be “totally unfair โคand abusive” to retirees whoโฃ contributed โto the authority โฃand adhered to the system’s terms.
Domenech forcefully rejected โขthe governor’s proposal, signaling a important obstacle to its implementation. The viability of the governor’s plan remains โฃuncertain as stakeholders clash over the future of PREPA’s pensionโค system and โits impact on the island’s economic recovery.