The Court of Appeals of Puerto Rico has ruled against a request to dismiss a lawsuit filed by the Sistema de Retiro de la Universidad de Puerto Rico (UPR Retirement System) against several UPR officials. This decision, made on May 28, 2026, is significant as it addresses allegations of negligence and misconduct that could impact the financial stability of the UPR's pension fund.
The lawsuit, originally filed on October 15, 2024, claims that UPR officials, including President Luis A. Ferrao Delgado and other members of the UPR Board of Trustees, failed to meet their fiduciary duties. The UPR Retirement System alleges that these officials diverted approximately $38 million intended for pension contributions, which jeopardizes the fund's solvency and the financial security of its beneficiaries.
The case arose after the UPR Retirement System accused the UPR and its officials of acting negligently and unlawfully, resulting in significant financial losses. The Retirement System is seeking $10 million in damages and an additional $1 million in punitive damages. The matter escalated as the UPR officials filed a motion to dismiss the amended complaint, arguing that the claims against them lacked specificity and failed to establish individual liability.
In the ruling, the court upheld the lower court's decision, which had previously denied the motion to dismiss. The judges on the panel included President Judge Hernández Sánchez, Judge Rivera Torres, and Judge Marrero Guerrero. Judge Rivera Torres emphasized that the allegations made by the Retirement System were sufficient to proceed with the case, stating, "if the allegations of fact in the amended complaint are taken in the most favorable light to the plaintiff, it does have the potential to establish a cause of action against the co-defendant."
The court's decision is crucial for the UPR Retirement System, as it allows the lawsuit to move forward and provides a platform for the Retirement System to present its case in court. The judges noted that the claims against the UPR officials could potentially fall outside the protections typically granted to public officials under immunity laws, particularly if evidence shows that their actions were negligent or intentional.
This ruling may set a precedent for future cases involving public officials and their fiduciary responsibilities, particularly in the context of public pension funds. The outcome of this case could influence how public officials manage funds and their accountability for financial mismanagement.
The ruling also highlights the importance of transparency and accountability in managing public resources, especially in the context of pension funds that affect many individuals' financial futures. As this case progresses, it will be closely watched by those concerned about public finance and the integrity of pension systems.
Moving forward, the UPR officials have the option to appeal this decision to a higher court, although details regarding any potential appeals were not specified in the court filing. The ongoing litigation may also affect related cases involving other defendants associated with the UPR, as multiple certiorari petitions have been filed in connection with this matter.