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1. What is the Pension Reserve Trust and why was it created?


The Pension Reserve Trust is an independent trust created to help provide confidence to current and future pensioners that their pensions will be paid and that the Government will have protected funds to help pay them.

2. How does the Pension Reserve Trust help protect pensions?

Each year, the Government of Puerto Rico will contribute funds to the Pension Reserve Trust, which will in turn be invested for long-term growth. The funds cannot be used for at least a decade and only used to make pension payments.

3. How does the US Federal Court and others protect pensions?


The creation of the Pension Reserve Trust was required by the Federal Court Order that confirmed the Commonwealth Plan of Adjustment in January of 2022. As it is a Federal Court Order, any violation of it should be presented to the Court for enforcement.

4. How else are pensions being protected?


The Puerto Rico Pension Benefits Council is another entity that was created by the Federal Court Order. Under that order, the Council members will review and confirm that the Government’s annual contribution to the Pension Reserve Trust is correct. The Pension Benefits Council is also responsible for approving any withdrawal requests from the Government.

5. Is the Government required to pay pensions?


Yes, under the Plan of Adjustment the Government is required both to pay pension benefits that are owed now and to contribute to the Pension Reserve Trust, so that the Trust can help pay for pensions in the future. If the Government does not make the required contributions, the Pension Benefits Council can go to the US federal court and ask that the Government be forced to make the payments.

6. Will the Trust have enough money to pay all pensions?


No. In order to pay all pensions the Government will have to provide most of the funds. The Government is responsible for making all pension payments owed to public employees and for at least the next decade will have to pay both pensions that are owed and make contributions to the Trust. Sometime beginning a decade or more from now, money from the Trust will be made available to help meet pension costs if the Government needs them.

7. Who controls the money in the Trust?


The Trust controls all the funds. The independent trustees decide how to invest the funds. The Government cannot get access to the funds without the agreement of the Pension Benefits Council or the US court, and even then can only use the money to pay pensions.


The Government legally cannot get any of the Trust funds before 2032. Even then, withdrawals must be approved by the Pension Benefits Council, reviewed by the Pension Reserve Board and in accordance with the Commonwealth Plan of Adjustment Pension Reserve Trust Guidelines.

8. Can the Government take funds from the Trust for anything except committed pension benefits?


No. The Trust’s funds legally cannot be used for any purpose other than to pay for pension benefits that are already committed. They can’t be used to offer additional benefits or any other purposes.

9. Who are the trustees and how were they selected?


Five independent trustees were selected during the summer of 2022. They were chosen based on their expertise in the areas of pensions, asset management and the field of economics. The five trustees offer an impressive depth of experience in economics, pensions, wealth management, asset management, and corporate governance.


The Board’s Chair is Jason Fichtner, PhD., currently Chief Economist of the Bipartisan Policy Center. The other trustees are Michael Finke, PhD, professor of Wealth Management; Joshua Gotbaum, Chair of the Maryland Small Business Retirement Savings Board; Desiree Mieses, Managing Member of Lumiere Bay, LLC.; and Gabriel Olivera, Chair of Preferred Capital Fund Management, LLC. A list of their professional accomplishments is available here.


The Pension Benefits Council selected two of the Trustees, the Government chose two, and the Financial Oversight Management Board chose one. Trustees serve for a six-year term and cannot be removed. The trustees, who are themselves investment experts, have also hired an experienced management team and expert advisors. You can read about them here.

10. Who manages the daily operations of the Trust?


María del Carmen López is the Executive Director of the Trust. Ms. López was selected by the Board of Trustees in a competitive process. She is a former Director within the Financial Oversight Management Board of Puerto Rico and a former Executive Director of the University of Puerto Rico Retirement System.


Julian Bayne is the Chief Financial Officer. An attorney and accountant, Mr. Bayne is the former Chief Legal Officer and Chief Financial Officer of the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF).

11. Will the money in the Trust be invested? How will it be invested?


Yes. The money will be invested in a mix of diversified investments designed to earn enough to meet projected pension needs without taking unnecessary risks. For more information, please refer to the Investment Policy Statement on our website.

12. How does the Trust decide what investments to make with the Government’s contributions?


The trustees, working with the professional staff and an investment advisory firm, have chosen a diversified mix of public stocks, bonds, and other investments. For more information, please refer to the Investment Policy Statement on the website.

13. Can the Government tell the Trust which investments to make?


No, it cannot. The PRT is independent from the Government. The Government appointed only two of the five trustees and those trustees do not work for the Government or take orders from the Government. The Pension Reserve Board has full authority to make investment decisions.

14. Are the Trust’s investments guaranteed?


No. Like most investments, their values will fluctuate month to month and year to year. However, the portfolio is designed and managed by professionals so that over the next several decades the Trust should be able to get the necessary returns.

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