Washington CNN Business  — 

The federal control board that oversees Puerto Rico’s finances on Friday released a plan that would cut the island’s debt by more than 60% and rescue it from bankruptcy.

The highly-anticipated restructuring plan comes three years after Congress created the federal oversight board, which allowed the territory to seek bankruptcy protection after years of facing its inability to pay its debt.

Puerto Rico was dragged into billions of dollars in public debt after decades of mismanagement, corruption and excessive borrowing to balance budgets. The government declared the debt unpayable in June 2015, and nearly two years later filed for the biggest municipal bankruptcy in US history.

The new restructuring plan targets bonds and other debt held by the government and will now go before a federal judge. The percentage of Puerto Rico’s taxpayer funds spent on debt payments will fall to less than 9%, compared to almost 30% before the restructuring.

It would also cut pensions for retirees who receive more than $1,200 a month.