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Fri Nov 16, 2018, 07:30 PM

Labor unions file pension lawsuit against Puerto Rico

Source: Reuters

U.S. LEGAL NEWS NOVEMBER 15, 2018 / 4:08 PM / UPDATED 11 HOURS AGO

Labor unions file pension lawsuit against Puerto Rico

Karen Pierog
3 MIN READ

CHICAGO (Reuters) - Puerto Rico violated a law meant to safeguard the pensions of its public-sector workers who have been unable to invest the more than $300 million they contributed to a new retirement plan, according to a lawsuit filed against the U.S. commonwealth’s government and others by two labor unions on Thursday.

The litigation, filed in U.S. District Court in San Juan, joins a long list of adversary cases in a form of bankruptcy Puerto Rico’s federally created oversight board initiated in May 2017 to restructure the island’s $120 billion of debt and pension obligations.

It is also the latest chapter in a fraught relationship between Puerto Rico and its government employees, particularly teachers.

In the latest lawsuit, the American Federation of Teachers and the American Federation of State, County & Municipal Employees point to Law 106, enacted in August 2017 to require wage deductions from workers participating in a new retirement plan to be placed into segregated employee-controlled, 401(k)-style accounts that they said have not been created.

The unions claim that while workers’ contributions totaled $316 million as of July 31, employees have been unable to invest the money, missing out on “historically high stock market returns.”

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Read more: https://www.reuters.com/article/us-usa-puertorico/labor-unions-file-pension-lawsuit-against-puerto-rico-idUSKCN1NK2Y3

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