Retirees defy Puerto Rico government, get pension deal with board

SAN JUAN, Puerto Rico (AP) — A group of retired public employees has defied Puerto Rico’s government and reached a deal with a federal control board overseeing the island’s finances as it works to restructure more than $50 billion in pension liabilities, officials said Wednesday.

The announcement angered government officials in the U.S. territory, who reject any cuts to a crumbling public pension system amid a 13-year recession.

The deal still has to be approved by creditors and then a judge overseeing a bankruptcy-like process for Puerto Rico’s government. If approved, it would protect more than 60% of retirees from any cuts, according to the pensioners’ group. They also said the deal limits pension cuts to a maximum of 8.5% for those who receive $1,200 or more a month in retirement benefits, compared with a maximum of 25% in cuts that the board sought. The cuts would not occur until July 2020 at the earliest.

Pension cuts have been a contentious issue as Puerto Rico tries to restructure a portion of its more than $70 billion public debt load while the board imposes various austerity measures.

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