Puerto Rico's Supreme Court has declared unconstitutional the teachers' pension reform passed by the Puerto Rico government in December.
The court released its decision Friday afternoon.
There are conflicting accounts as to why the majority struck down the reform.
Puerto Rico's government passed the reform of the teachers' pension plan at about the same time as it passed the reform of the judicial pension plan. In February the Puerto Rico Supreme Court largely but not entirely upheld the judicial pension reform. Puerto Rico Gov. Alejandro García Padilla was satisfied with what the court left of the judicial pension reform.
Prior to the December reform, the teachers' pension plan had a $10 billion actuarial liability and was expected to run out of money in 2020 without changes to its revenues or expenses. At that point the Puerto Rico General Fund would have had to support it.
The government reformed its main Employee Retirement System in the April 2013. This had a larger liability and was expected to run out of money within a few years without changes.
The judicial pension plan, prior to reform, had a much smaller liability than the teachers' plan.
