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Office of the Comptroller audits reveal that, since 2018, several municipalities have hired retired employees and did not follow the established steps to reduce their salaries or stop the pensions they receive from the government

El Nuevo Día - Sep 4, 2025 - GLORIA RUIZ KUILAN gloria.ruiz@gfrmedia.com

Six audits conducted by the Office of the Comptroller revealed that the municipalities of Manatí, Barranquitas, Rincón, Adjuntas, Villalba and Barceloneta hired or employed retirees, but did not follow the legal regulations.
Six municipalities hired or employed government retirees, from 2018 to the present, without following the laws and regulations that require stopping the payment of their pensions or giving them reduced compensation, the Office of the Comptroller revealed.

“We have seen appointments to ‘full-time' positions that have not informed (the) Retirement (System) that they are working ‘full-time,'” indicated the comptroller, Yesmín Valdivieso, in an interview with El Nuevo Día.

Six audits conducted by her office revealed that Manatí, Barranquitas, Rincón, Adjuntas, Villalba and Barceloneta hired or employed retirees, but did not follow the regulations in force.

In the case of Rincón, Manatí, Barceloneta and Villalba, the Office of the Comptroller determined that payments that did not correspond were made and the restitution of the money was requested. The reports detail that in just three municipalities –Manatí, Barranquitas and Barceloneta– overpayments totaling some $241,200 were issued.

In light of this, Valdivieso issued a circular letter (OC-26-07), this past August 14, with the aim of clarifying the treatment that should be given to a retiree who returns to work in the government.

“So that they understand well what Act 53 sought, that is, yes, we are going to receive, we are going to take advantage of those people who have all that knowledge and bring them back to the government. But, that if you are going to work in a ‘full-time' job, you have to halt the payments you receive from the pension. What I want is to impart knowledge and clarify that law,” she maintained.

The administrator of the Retirement Systems, Arnaldo J. Ortiz Miranda, assured, in a telephone interview, that they do not face problems with the agencies or municipalities in reporting the hiring or employment of a pensioner and complying with Act 53 of 2022.

“Normally, the Comptroller, as a general rule, every year, always issues circular letters on all topics and adapts them to the laws,” he said about OC-26-07.

In 2022, the then governor, Pedro Pierluisi, promoted and signed Act 53, which establishes the rules for retirees to return to work in the government, including the municipalities.

The statute specifies that any retiree, including those who, without having the age or years of service, decided to take a voluntary transition program, may return to work in the government, including the municipalities. However, when it comes to a retiree who draws a pension, certain steps must be followed that include notifying –whether the retiree himself or the agency that hires him– the Retirement System, so that the pension is paused.

In this way, the retiree can “receive the salary corresponding to his appointment, as established in the classification and compensation plan of the government entity,” reads OC-26-07, in line with Act 53.

“Therefore, a pensioner cannot receive at the same time his pension and a full-time salary from a government entity,” the document stresses.

Act 53 and its regulation provide that the pensioner or the agency have 15 days to notify the Retirement System of the retiree's return to public service. Entities that reincorporate a retiree must render a report to the Office of Administration and Transformation of Human Resources (OATRH) and to the Fiscal Oversight Board. The reporting periods are from July 1 to December 31, and from January 1 to June 30 of each year.

The executive director of OATRH, Facundo Miguel Di Mauro Vázquez, said they have not faced problems obtaining the data for the reports.

“Right now, we have 85 people registered (interested in returning to the government). They register for three years and, then, it can be renewed,” he maintained, and detailed that 82 pensioners were employed or hired last fiscal year.

WHY WAS IT NECESSARY?

OC-26-07 arose as a result of findings in audits and noticing that the observations about hiring retirees were repetitive, Valdivieso said.

For example, in Manatí, the Office of the Comptroller detected “overpayments to a pensioner who was granted service contracts with characteristics of positions,” in an audit from January 1, 2013 to June 30, 2016. “The commented situation caused excess expenses of $23,940,” the analysis concluded.

For the audited period, Act 53 did not exist, but Act 447 of 1951 did, which, in addition to creating the Retirement System, establishes the framework for retirement and pension benefits for public employees. The statute indicates that every pensioner may hold a regular part-time job in the government that, in time and compensation, does not exceed half of the regular workday.

“We determined that compensation was granted to an employee who was receiving a pension from the Retirement System,” the Office of the Comptroller noted in its findings.

The mayor of Manatí, José Sánchez, was not available for an interview, but, through a spokesman, made it known that he currently does not have pensioners working in the municipal administration.

The same observation as Manatí occurred in Barranquitas, with an audit that also covers from January 1, 2013 to June 30, 2016.

Mayor Elliot Colón indicated that, at the moment, he also does not have pensioners working in the town hall, and emphasized that he knows the provisions of the law. “That (reinsertion of a pensioner into the government) depends on a case-by-case basis,” he said.

Rincón, for its part, was audited for the period from July 1, 2012 to June 30, 2016. The report reports four pensioners who were given a monthly salary that did not correspond to them, because they were paid the entirety of what the salary scale established when they should have drawn only half.

The four were paid $13,609 in excess, the audit revealed.

In Adjuntas, the audit is more recent. Published in 2022, it covers from January 1, 2017 to December 31, 2020. The Office of the Comptroller found that 13 contracts were given to a pensioner to perform functions that “had characteristics of a career position.”

In addition, the report highlights that, according to Act 447, “every pensioner… may work in government entities no more than half of the regular workday, and may not collect more than half of the basic salary that corresponds to the position he holds,” which was being violated in the audited case.

Meanwhile, in Villalba, the Office of the Comptroller found three pensioners “who did not report their return to active service so that the suspension of the pension could be processed,” who received benefits and whose function was equivalent to a career position, indicates the report corresponding to the period from July 1, 2014 to December 31, 2019.

“For these jobs, payments were agreed that fluctuated from $629 to $3,000 monthly,” it concluded.

The mayor of Villalba, Dan Santiago, reacted by assuring that he has a team in human resources that “makes sure to comply with the regulations on that matter; I know they are up to date.”

The problems were also confirmed in Barceloneta. There, the report notes, payments were detected “to a pensioner, of more than $203,000, contrary to law and regulation.” According to the audit, the pensioner should have been paid $65,382.14 and, instead, the municipality disbursed $269,031 to her.

The mayor of Barceloneta, Wanda Soler, was not available.

DEFENDS OVERSIGHT

Faced with these findings, Ortiz Miranda, of the Retirement Systems, defended that they can oversee that pensioners and government entities comply with notifying it and recover improper payments.

He explained that the pensioners' payrolls are “run” two weeks ahead of payday so that the Department of the Treasury can disburse. Since the agencies have up to 15 days to report the reinsertion, he said, it is enough time for the Retirement System to be able to capture in each one's payrolls if there is a pensioner collecting double.

“The pensioner appears in two payrolls: in ours collecting the pension and in the municipality's or agency's contributing to Plan 106. Obviously, there the system alerts us that we have to verify whether that appointment, in the case that it has not been reported, meets the requirements. That is, that the time and the money do not exceed half of the regular position the pensioner is holding. That it not exceed half of the salary base and not exceed more than half of the workday,” he clarified.

“If the employee meets those requirements, we have nothing to recover. In the cases where a pension adjustment corresponds, a recovery also proceeds,” he added.

Ortiz Miranda detailed that they have a registry of 179 retirees who returned to the government. Of that number, 107 work in municipalities and 72 in agencies.

Of the 72 in the agencies, he elaborated, 15 work full-time, 31 part-time and 26 through professional services or contract. Meanwhile, in the municipalities, there are 18 working full-time, 65 part-time and 24 through professional services.

“The municipalities that have the most, part-time, are San Sebastián, Trujillo Alto and Morovis, which each have five (pensioners),” he highlighted. “Being part-time, the pension payment is not harmed.”

“For being full-time, the pension payment is suspended, and the agency that has the most (pensioners) is the Gaming Commission, with 10,” he indicated.

Although the Office of the Comptroller has not detected problems with the reinsertion of retirees in the agencies, Valdivieso did not rule out that there are cases identical to those found in the municipalities.

“Remember that we do audits by sample, so that, if perhaps in the sample you have 500 employees and in my sample 20 came up and those 20 were fine, I don't keep looking. I then assume that, if I took that sample well, if that is fine, the rest are fine. That does not mean they are fine,” she explained.

She stressed, finally, that the doors of the government are open for pensioners who want to contribute with their experience and work, “but there are some limitations.”