House committee hears bill to restore cost‑of‑living adjustments for public pensions; fiscal and legal limits flagged

A House commission held a public hearing April 22, 2026 on PS45 (also referenced as PDC45), a bill that would restore a cost‑of‑living increase for Puerto Rico public retirees and provide an initial uplift to annuities.

The author and commission chair opened the hearing by saying lawmakers sought to address prolonged purchasing‑power erosion for pensioners who have not received increases in 18 years. "Los 500 pesos de hace 18 años no son $500 hoy," the chair said, urging agencies to give the legislature a clear plan to finance any change.

An aide from the Office of Management and Budget (OGP), Osvaldo Guzmán López, read the agencies' ponencia and summarized the proposal: an initial increase (the bill text describes up to 10% using a $3,000 maximum annuality for the calculation) effective July 1, 2025, and an annual COLA tied to the U.S. Social Security cost‑of‑living adjustment beginning July 1, 2026.

OGP presented fiscal scenarios showing a sizable budgetary impact if the higher scenarios were adopted. The office cited an estimate of about $265.9 million in FY2026 under a 10% initial increase that could rise toward roughly $528.4 million by 2030; OGP also showed lower‑cost scenarios for 3%–6% increases (for example, roughly $78.0M in 2026 under a 3% scenario). OGP stressed that, under the certified fiscal plan and the requirements of the PROMESA framework, any recurring pension obligation requires a certain, budgeted funding source and that using unallocated or contested "sobrantes" can be legally and practically constrained.

Luis Roberto Rivera Cruz, AFAF's director of intergovernmental affairs, reiterated the fiscal and—importantly—legal limits identified in the agencies' memorials. He pointed to an express restriction included in the plan‑of‑adjustment confirmation order (referred to in testimony as paragraph 62) that, according to agency counsel, prohibits creating or increasing defined‑benefit pension payments or reinstating COLA by ordinary legislation for the identified period under Title 3. Rivera Cruz warned that, without negotiated remedies or clear, certified funding, implementing the measure risks violating that order.

Lawmakers responded by describing the social need and offering negotiation options. Representative Neli Lebrón Robles cited demographic and poverty statistics for older adults and noted recent general‑fund receipts that produced multi‑year surpluses; she asked agencies to report the last five years of surpluses and to convene a technical meeting to identify workable alternatives. Several members pressed for an actuarial study and for the three agency heads (Hacienda, OGP and AFAF) to attend a follow‑up meeting; the chair set a deadline for agencies to return signed, complete documentation and gave the panel seven business days to provide the additional information or face stronger steps to secure compliance.

Members discussed compromise approaches that might reduce legal risk or fiscal exposure, including lower initial increases (3%–6%), non‑COLA one‑time compensations, or other temporary measures while the jurisdiction seeks negotiation with the oversight board. Committee members emphasized they were not abandoning the bill but sought options consistent with the certified fiscal plan and the plan‑of‑adjustment order.

The commission closed the hearing at 12:26 p.m. with members agreeing to pursue a prompt technical meeting and additional actuarial and budgetary detail before advancing legislative action.