The Virgin Islands government is appealing a court order to pay more than $63 million to the Government Employees’ Retirement System, a move that could push the pension system even closer to financial collapse.

Attorneys for the GERS, meanwhile, filed a cross appeal arguing the judge’s order doesn’t go far enough, and the government owes more than $1.6 billion.

Deputy V.I. Attorney General Carol Thomas-Jacobs filed the government’s notice of appeal to the 3rd U.S. Circuit Court on Tuesday, after U.S. District Court Judge Curtis Gomez issued the payment order as part of a federal consent decree.

Established in 1959, GERS filed a complaint in District Court in 1981, claiming the government was failing to pay the required employee and employer pension contributions on a timely basis. Despite a consent decree agreement reached in 1984 and court orders spanning decades, disputes have persisted over how much, exactly, the government still owed the pension system, with each side presenting wildly divergent figures to the court.

After several hearings in recent months, Gomez ordered the government to pay GERS $5 million in February, but warned that the amount could increase upon further calculation by a court-appointed financial analyst.

He subsequently found that the V.I. government failed to pay $13.86 million in employer contributions between 1991 and 2009, and ordered the government to pay GERS that amount, plus $43.16 million in interest. He also ordered the government to pay GERS $6.12 million in interest on unpaid employer contributions between 2010 and 2018, for a total of $63,143,506.

Gomez ordered the government to pay in a series of seven equal installments every 30 days, with the first $9,020,500 due May 3, and wrote that the payments are the only way for the pension system to “forestall insolvency.”

The appeal is likely to be a lengthy, expensive undertaking for the V.I. government. Three Miami-based lawyers with the firm Greenberg Traurig LLP, Elliot Scherker, Brigid Cech Samole, and Katherine Clemente, have filed appearances in the case.

The Pennsylvania-based 3rd Circuit judges only hold sittings in the Virgin Islands twice a year, so the case is “tentatively listed for calendaring in May 2021,” according to court records.

Government House Communications Director Richard Motta Jr., and V.I. Attorney General Denise George did not respond to requests for comment Monday.

GERS’ current unfunded liability is estimated to be around $1.6 billion, and the pension system could become insolvent as early as 2023.

GERS Administrator Austin Nibbs wrote in a recent letter to pension system members that the Board of Trustees met Wednesday to consider Gomez’s order awarding the $63 million, “but denying enforcement of the 1984 consent decree on the Actuarially Determined Employer Contribution (ADEC) which exceeds $1.6 billion.”

While employer and employee pension contributions are calculated based on a percentage of each individual’s compensation, the ADEC is the amount calculated annually that, together with the system’s other income, “will be sufficient to provide adequate actuarially determined reserve for the annuities and benefits herein prescribed,” according to court records.

That means that under V.I. law, the government is required to fund the pension plan at the amount the GERS actuary says is needed to properly pay employees the benefits they were promised.

In the opinion he issued April 3, Gomez found that the issue of ADEC was ambiguous, so he looked to other aspects of the consent decree contract and relevant laws for context.

The law provides that employer and employee contributions be paid into the system each payroll period, but didn’t specify when payment should be made for the ADEC.

The disputed portion of the consent judgement requires the government to make payments to GERS within 30 days of each payroll period, and “the ADEC computation was only determined annually,” Gomez found. “It is hard to conceive how the parties intended an obligation that was only calculated and known once a year to be due, either in whole or in part, 24 times per year.”

Given that context, Gomez ruled that the consent decree’s terms “did not contemplate the payment of the ADEC,” and the government is not obligated to pay it.

The GERS Board disagrees, “and directed its lawyers to seek review of that portion of the decision in the U.S. Third Circuit Court of Appeal,” Nibbs said in his letter to members.

Board members simultaneously authorized attorneys to file a separate action to enforce payment of the ADEC in V.I. Superior Court.

“We note that as a witness during the trial, the former Commissioner of Finance Valdamier Collens testified that the GVI owes the GERS the ADEC,” according to Nibbs’s letter.

Nibbs went on to write that the government’s appeal of the $63 million order, which is “expressly supported by the Governor, exemplifies the continued pattern of non-payment of retirement costs which has led the GERS to the edge of insolvency.”

The pension plan represents a full quarter of the territory’s Gross Domestic Product, and “the Board took note of the resulting grim economic forecast that insolvency of the GERS would occasion,” Nibbs wrote. “The Board also expressed its regret that governors and legislatures since 2006 have failed to take serious steps to avoid the impending economic crisis.”

— Contact Suzanne Carlson at 340-714-9122 or email scarlson@dailynews.vi.