Company: OIA
Filing Date: 2025-02-07
Form Type: N-2/A
Source: 0001104659-25-010545
Chunk: 175

Company: Invesco Municipal Income Opportunities Trust
Filing Date: 2025-02-07
Form: N-2/A
Chunk 175
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 federal policy changes may be enacted in the coming years and the economic impact of those changes. Due to the Commonwealth’s dependence on federal transfers, any actions that reduce or alter these transfers may cause increased fiscal stress in Puerto Rico, which may have a negative effect on the value of the Commonwealth’s municipal securities. Retirement Systems.The Commonwealth’s retirement systems include the Employees Retirement System (“ERS”), the Teachers Retirement System (“TRS”) and the Judiciary Retirement System (“JRS” and together with the ERS and TRS, the “Pension Systems”). As of July 1, 2017, the total actuarial liabilities for the ERS, the TRS and the JRS were approximately $31.0 billion, $17.0 billion and $700 million, respectively. The total annual benefits due from the ERS, TRS and JRS for FY2018 totaled approximately $1.5 billion, $700 million, and $25 million, respectively. In 2017, the Legislative Assembly enacted laws to reform the operation and funding of the Pension Systems. Those laws required the ERS to sell its assets and transfer the proceeds to the General Fund. In addition, employer contributions to the Pension Systems, which had been operating on a “pay-as-you-go” basis, were eliminated, and the General Fund assumed any payments that the Pension Systems could not make. The Oversight Board reported in its 2022 Fiscal Plan that, over many decades, successive Commonwealth governments have failed to adequately fund these retirement plans, and that the ERS, TRS and JRS were insolvent. The Oversight Board reported in its 2023 Fiscal Plan that, historically, government pensions were not sufficiently funded, putting the ability to make pension payments for current and future retirees at risk. The Plan of Adjustment (see “Debt” section below) and 2023 Fiscal Plan, together, minimize this risk through a series of pension initiatives. Most importantly, the budget now funds estimated pay-as-you-go (PayGo) payments and the Plan of Adjustment authorizes the establishment of a new Pension Reserve Trust, which allocates surplus funds to support future payments to retirees. Pension Reserve Trust and PayGo accounts for about 10% and 20% of General Fund expenditures in FY 2023, respectively. The Commonwealth may have to make additional contributions to the Pension Systems, which could result in reduced funding for other priorities, including payments on its outstanding debt obligations. Alternatively, the Commonwealth may be forced to raise revenue or issue additional debt. Either outcome could increase