Puerto Rico Gov. Alejandro García Padilla is considering calling an extraordinary session of the Puerto Rico legislature to overhaul the commonwealth's teacher pension system.

When Moody's Investors Service put Puerto Rico bonds on review for a downgrade last week, the rating company named Puerto Rico's possible reform of the teachers' pension as one of five things it would keep an eye on in the review period.

The legislature has been scheduled to next meet on Jan. 19. Under Puerto Rico's constitution, the governor has the right to bring about an extraordinary session at any time.

On Tuesday the governor met with representatives and senators to talk about calling a legislative session to deal with the teachers' pension. Puerto Rico's public school teachers are employees of the commonwealth government.

Several sources reported that García Padilla was planning to call such a session for as soon as Wednesday and that he met with leaders of the teachers unions to discuss the reforms Tuesday afternoon.

The teachers' pension has an actuarial deficit of $10 billion, said Puerto Rico Sen. José Nadal Power. Without changes to the fund, it would run out of money in 2018 or 2019, he said. At that point the government's General Fund would have to cover any shortfalls.

The teachers' unions probably won't support the governor's proposals, Nadal Power said. In recent days some teachers unions were threatening to withhold final semester grades if the governor called an extraordinary session to reform the pension system.

The governor will propose a plan that is fair for the teachers, Nadal Power said, andthe unions may agree with some of the general points.

"Teachers are not willing to accept changes in the rights and benefits as provided by current law," said Aida Díaz, president of the Puerto Rico Association of Teachers. "This position is justified because there are other sources of income to raise funds for our retirement system and so we have made this known to the governor."

Unlike other people who work in Puerto Rico, the teachers don't get social security benefits when they retire. The average retiree receives $1,330 per month in his or her pension, according to the Association of Teachers.

Nadal Power and another legislative sources said lawmakers are increasingly coming to the opinion that the teachers' retirement system needs to be reformed. "The sooner we act, the easier it will be to deal with," Nadal Power said. Reforming the teachers' pension is the last major step that needs to be taken to address financial threats the General Fund, Nadal Power said.

The legislature may vote on reforming the teachers' pension system as soon as this week, Nadal Power said.

If the legislature meets it may address fiscal shortfalls of the judiciary retirement system as well, Nadal Power said. However, this system's financial shortfall is far smaller.

Reform of the teachers' retirement system is an "important step that they need to take and sooner is always better than later," said AllianceBernstein senior vice president Joseph Rosenblum.

Municipal market observers will be looking at the commonwealth's possible reform of the teachers' pension plan along with economic performance, revenue and budget performance, liquidity and market access, and the government's preparation of a fiscal 2015 budget, Rosenblum said.

Dealing with the financial problems of the teachers' pension system would be positive but it isn't as important as getting the Puerto Rican economy rolling again, said Axios Advisors managing partner Triet Nguyen.

In April Puerto Rico's government adopted a bill that reformed the Employees Retirement System, which had a bigger actuarial deficit.

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