This article, by the Executive Vice President of the American Federation of Teachers, Evelyn DeJesus, is a response to a view we published earlier this week, “AFT Should Not Be Negotiating Pensions teachers of Puerto Rico ”, by the MORE Caucus in New York City. United Federation of Teachers. — Editors
With all due respect, the Working notes-The published view on tackling Puerto Rican teacher retirement lacks essential facts. If we are to win victory over the relentless attack on workers’ pensions, the trade union movement must mobilize and strategize together. That’s what private sector unions accomplished this year ahead of President Biden’s help to multi-employer plans as part of the US bailout. Unfortunately, we hardly have any real allies in the bankruptcy process.
The Asociación de Maestros de Puerto Rico (AMPR, the Puerto Rican Teachers Association), its local Sindical and the American Federation of Teachers continue to oppose any cuts to teachers’ pensions. (AMPR is a subsidiary of AFT — Eds.) It is clear and central in the proposal that we negotiated. It is also clear that our unions are unwavering against the pension freeze as proposed in the bankruptcy case. It will continue to be an incredible fight.
DECIMATED PUBLIC PENSIONS
You cannot fight pension cuts without considering the facts. For many years virtually all defined benefit pension plans for public employees were wiped out in Puerto Rico. There are only two major public employee pension schemes that remain active and permanent: the Teachers ‘Scheme (TRS) and the Judges’ Scheme (JRS).
The freezing of these two pension plans is part of the juntas bankruptcy plan pending in United States district court. The government of Puerto Rico is bankrupt, owes billions of dollars and has not demonstrated a way to pay its debt. The political mismanagement of public finances is a criminal act, including pension plans. It is estimated that the teachers’ plan is only funded about four cents on the dollar. They recklessly mis-spent our retirement dollars.
The new federal law, PROMESA, allowed the Commonwealth of Puerto Rico to declare bankruptcy. The law also established that a supervisory board, called the junta, is the only party that can submit a draft bankruptcy exit plan. Any creditor who wants to fight in a bankruptcy case knows that the junta has this exclusive power.
AMPR and Sindical leaders called on AFT to help (not lead) them through this oppressive and complex anti-worker bankruptcy process. AFT has supported our affiliates by offering the legal, union and financial teams to get involved in the local union’s fight to maintain the teachers’ pension plan. AFT’s assistance strengthened the voice of our members on the streets and in court.
The latest bankruptcy negotiations came after 11,000 grassroots teachers signed a petition asking their union to try to renegotiate a bankruptcy plan to save the pension and include a back-up plan in case the court decides to freeze the plan. These teachers who signed the petition understood that doing nothing could result in a pension freeze imposed by the court. So, with our political and popular opposition, we still had to navigate the complex bankruptcy process.
Based on the sentiment of the members, AMPR has embarked on a difficult renegotiation. These negotiations resulted in the current agreement which is currently being voted on.
The first priority of this agreement stipulates that the teachers’ pension plan be saved. This is legally known as the ‘most favored nation’ clause, which means that if legislation is passed to save public pensions, such as Law 7 (the “dignified retirement” law, which protects public pensions — Eds.) —Teachers get the same treatment! In fact, any better retirement salary will automatically cover teachers and save their defined benefit plan. Moreover, if the JRS judicial pension scheme is safeguarded, so will the teachers’ scheme. In essence, if our political or public effort succeeds in saving the plan, our teachers are protected.
But what if these efforts fail? All other large defined benefit plans for public employees in Puerto Rico have been frozen for years. Most bankruptcy proceedings involving pension plans have resulted in pension erosion imposed or negotiated by the courts. It is a reality that cannot be fought rhetorically. A real alternative was needed.
If and only if political and public struggles do not save the teachers’ pension plan, then the second part of the voted agreement will come into force. This “Plan B” or “seguro” (“insurance”) aspect of the arrangement only occurs if all other attempts are unsuccessful. Otherwise, we are left with the court decision.
The terms of the strategic safeguard plan come directly from union meetings, interviews and the voices of our members. If, unfortunately, the pension is frozen, the frozen plan will have many more enhanced pension benefits than any previously frozen plan. These include better early departures, gateways to retirement and multipliers.
In addition, almost all of our teachers have never been affiliated with Social Security. This plan B creates a basic teachers watch group to oversee a compulsory transition to social security. In addition, teachers’ health care benefits have been increased. In addition, there is a new five-year collective agreement. And payments to teachers are included. These negotiated Plan B benefits, which only come into effect if there is a court-ordered pension freeze, total more than $ 1.2 billion.
Hopefully Plan B does not start because we would have managed to save the teachers’ pension plan. Without a back-up plan, teachers would be left with the juntathe plan of. It is a lose-lose result. It is also wrong not to let our members vote on this potential deal, in any case. (Digital voting is run by a leading independent voting organization that many unions use.)
So let us unite on behalf of working families and do not attack each other without knowing all the facts and never talking to each other. Let us fight for pensions on several fronts and have strategic plans, including alternatives. Let us give grassroots members the right to vote, yes or no. Whatever the outcome, thousands of our members will vote and lead their future.
Evelyn DeJesus is the Executive Vice President of the American Federation of Teachers.