P.R. Laws tit. 3, § 9265
Pre-retirees shall receive the following benefits:
(a) Sixty percent (60%) of their average compensation as of December 31st, 2015, until they attain age sixty-one (61). Payment shall be made by the employer with the same frequency as it would have been made if the employee had remained employed.
The income received by pre-retirees during their participation in the Pre-Retirement Program on account of the payment of sixty-percent (60%) of their average compensation as of December 31st, 2015 shall be considered, for tax purposes, as if it was received as a pension granted by the retirement systems or funds funded by the Government of Puerto Rico, in accordance with § 30391 of Title 13, known as the “Puerto Rico Internal Revenue Code of 2011”, and subject to the limitations established in §§ 30102(a)(13) of Title 13.
(b) Payout of unused vacation and sick leaves accrued as of the time of enrollment in the Program, in accordance with the limits established in the applicable legislation or regulations, exempt from income taxes.
(c) While the person is enrolled in the Program, his/her account under the Defined Contribution Hybrid Program shall continue receiving the total amount of the individual contribution that the pre-retiree would have contributed, paid in full by the employer, at a rate of ten percent (10%) of his/her average compensation as of December 31st, 2015.
(d) Except for employees currently excluded from the payment of Social Security, during the time the participant is enrolled in the Program, the employer shall continue to make employer contributions on account of Social Security (6.2%) and Medicare (1.45%) corresponding to sixty percent (60%) of the participant’s gross income. However, equal percentages corresponding to individual contributions shall be deducted from the participant’s compensation.
(e) Keep health insurance coverage or medical service program, or employer contribution for health insurance, that the employee enjoyed at the time of making an election to enroll in the Voluntary Pre-Retirement Program up to two (2) years, as of the enrollment date or until he/she enters the Retirement System, or until the participant is eligible to receive health insurance coverage in another employment, or by any other source of coverage, whichever comes first. Provided, that if the two-year health insurance coverage ends and the Program participant has not entered the Retirement System or has not become eligible for another health insurance coverage, said pre-retiree may choose to avail him/herself of the health insurance coverage for public employees under §§ 729a et seq. of this title, known as the “Public Employees Health Benefits Act”, defraying the cost of the corresponding premium at his/her own expense.
(f) May request the agency or the municipality to deduct and withhold from the sixty percent (60%) of the compensation they will receive, contributions on account of savings, loan payments, insurance premiums, or any other applicable payment at the time, as provided in §§ 9001 et seq. of this title, known as the “Commonwealth of Puerto Rico Employee Association Act of 2013”, but in no case the savings contributions shall be mandatory. Likewise, participants may choose to withdraw their savings from AEELA, insofar as they are not securing any debt with such entity.
(g) If a pre-retiree dies while participating in the Program, his/her participation in the Program shall automatically end and his/her beneficiaries or heirs, as the case may be, shall receive the same benefits they would have received under §§ 761 et seq. of this title, and any other benefit to which they would have been entitled under any special law if the pre-retiree was an active employee of the Commonwealth of Puerto Rico; and
(h) Once a pre-retiree attains age sixty-one (61), he/she shall enter the Retirement System and receive the benefits to which he/she is entitled as a pensioner of the Commonwealth of Puerto Rico, in accordance with §§ 787a—787q of this title; Provided, That Program participants shall be guaranteed, at the time of their retirement, a minimum benefit of fifty percent (50%) of their average compensation as of June 30th, 2013, if the combination of annuities of the contributions frozen as of June 30th, 2013, and the contributions made to the Hybrid Program account do not reach such minimum percentage. In the case of the members of the Puerto Rico Police, said minimum benefit may represent up to sixty percent (60%) of their average compensation as of June 30th, 2013, if the Pre-Retirement Employer Plan of their agency contemplates additional contributions to the Hybrid Program to achieve a minimum benefit in excess of fifty percent (50%). System participants who, as of June 30th, 2013, were availing themselves of the Coordination Plan with Federal Social Security, shall have their accrued annuity benefits adjusted, as provided in § 766(e) of this title; Provided, That the participant may receive the annuity established in § 787c of this title, until he/she is entitled to avail him/herself of the Federal Social Security Benefits, and the combination of annuities shall never be less than fifty percent (50%) of their average compensation as of June 30th, 2013. The amount of the additional contribution to be injected into the Retirement System while the employee is availing him/herself of the Voluntary Pre-Retirement Program so that, upon retirement, he/she may receive a combination of benefits for retirement annuities that represents the minimum benefits provided above, shall be paid in full by the employer as part of its Pre-Retirement Employer Plan.
(i) A participant who opts for preretirement for having begun working for the Commonwealth of Puerto Rico as a transitory or irregular employee before April 1, 1990 and who, due to his job status was unable to contribute to the Retirement System since the beginning, but was subsequently appointed in the career service under Act No. 1 of February 16, 1990, and has paid those previous years of service on or before June 30, 2013 in order to accumulate years of credited service retroactively to a date prior to April 1 st, 1990, may also participate in the Preretirement Program until he reaches the age of 61. In addition, for retirement purposes, said participant shall be treated just as the employees who began working prior to April 1, 1990, and to whom the provisions of §§ 761 et seq. of this title, apply as to the manner in which their average compensation shall be determined and their frozen benefit annuity shall be calculated.
History —Dec. 8, 2015, No. 211, § 6; Aug. 9, 2016, No. 170, § 5.