“Para enmendar el Artículo 3.5 de la Ley 106-2017, según enmendada y conocida como “Ley para Garantizar el Pago a Nuestros Pensionados y Establecer un Nuevo Plan de Aportaciones Definidas para los Servidores Públicos” a los fines de establecer que a partir del año fiscal 2027-2028 los municipios no tendrán obligación de pagar al “Pay as you Go”, ni el Centro de Recaudación de Ingresos Municipales (CRIM) la obligación de remesar pagos a esos fines; y para otros fines relacionados.”

2025-2028 Session

Bill PS 827 ends municipal PAYGO pension payments and CRIM remittances from FY 2027-28, signaling a shift to a new pension funding mechanism yet to be defined.

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Summary of Bill PS 827

A concise overview of the proposed legislation titled “Para enmendar el Artículo 3.5 de la Ley 106-2017, según enmendada y conocida como ‘Ley para Garantizar el Pago a Nuestros Pensionados y Establecer un Nuevo Plan de Aportaciones Definidas para los Servidores Públicos’” and its potential impact.

Purpose and intent

The bill seeks to amend Article 3.5 of Law 106-2017 (the pension reform law) to change how pension funding payments are handled beginning in fiscal year 2027-2028.

Specifically, it proposes that municipalities would no longer have an obligation to make PAYGO (pay-as-you-go) pension payments, and that the Centro de Recaudación de Ingresos Municipales (CRIM) would no longer be required to remit payments for those purposes.

The text indicates the aim is to enforce these changes “for the purposes described and for other related purposes.”

Key provisions

Amend Article 3.5 of Ley 106-2017 to remove municipal PAYGO payment obligations starting in FY 2027-2028.

Remove CRIM’s obligation to remit payments to support PAYGO funding for pensions.

The language also leaves room for “other related purposes,” meaning additional adjustments or mechanisms could be addressed in the bill’s broader framework (not fully specified in the available summary).

Affected entities and impact

Municipalities: End of mandatory PAYGO pension contributions under the amended provision, as of FY 2027-2028.

CRIM: Termination of the obligation to remit PAYGO-related payments.

Pension system and public servants: The bill implies a restructuring of how pensions are funded, though the specific funding mechanism to replace PAYGO (e.g., a centralized fund or a new plan) is not detailed in the summary provided.

General fiscal landscape: Potential reallocation of funding responsibilities between local and central levels, with possible implications for municipal budgets and intergovernmental finances.

Fiscal and policy implications (subject to bill text)

Possible shift of pension funding responsibilities from municipalities/CRIM to a different source (not explicitly defined here).

Impacts on municipal cash flow and budget planning starting FY 2027-2028.

Transitional considerations and need for implementing regulations to operationalize the change.

Next steps and considerations

Monitor committee hearings for interpretations of the intended funding substitution and any transitional provisions.

Look for amendments clarifying:

The new funding mechanism replacing PAYGO.
Timeline specifics and any required regulatory actions.
Impacts on retirees, contractors, and municipal payrolls.

Public stakeholders (municipal governments, CRIM, pension boards, and public employees) may seek details on fiscal impact and long-term sustainability.

Note: This summary reflects the information currently available. The full text of PS 827 would provide definitive language on the provisions and any fiscal notes.

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