FSM Executive Branch Responds to Congress Resolution on Social Security Issues

Press Release #0409-49
Palikir, Pohnpei – FSM Information Services
April 30, 2009

During the last session of the 15th FSM Congress in March of 2009, Congressional Resolution No. 15-206 was passed which tasked the Executive Branch to engage in a study of the Social Security law, system, and options for improving the system.  This Resolution was made in response to the new Social Security amendments that Congress passed in the January 2009 session that has created a lot of discussion and talk among the states and businesses in the private sector.  Many people are opposed to the amendments. In fact, President Manny Mori allowed the bill to become law without his signature.

 In response to this Resolution, the Social Security Administrator, Mr. Alex Narruhn, has started working on an Evaluation Report of the Social Security System that will include data through 2008.  This report will show all the statistics on employment contributions and emphasize the Actuarial Valuation, which will determine the actual unfunded accrued liability up to December 2008 with consideration of the new law.  They are also currently working on a 10 Year Liability Study Test to look at the next ten years of liability that the Social Security Administration predicts they will have.  Together, these two reports will give a clearer picture of where the Social Security System is today and where it will be in ten years using the current law and tax rates.  This information will be presented to Congress as soon as the reports are completed.

Reviewing Public Law No. 15-73 on Social Security will be a priority area of discussion at the next State-National Leadership Conference (SNLC), set for May 12th-15th, 2009, so the viewpoints of the state governors and legislators can be shared in one forum and direction can be set on what amendments may need to be made to the law as it stands.  In the meantime, President Mori is advocating for a cash infusion to the Social Security System be made by the FSM Government to handle the short term crisis that it faces, which will also, in effect, supplement the 2% increase in employee/employer contribution that the new law requires until the private sector is ready to handle this increase when the economy recovers from the recession that it is currently in. 

The Resolution also asks the Executive Branch to look at other Social Security Programs in the Pacific region.  The plan is to compare our system and the problems it is facing with other similar defined benefit systems in RMI and Palau.  The President has tasked the FSMSSA to look into these differences and report on them during the SNLC in May. 

The transmittal letter to Congress from the President states that, “we are working very hard to find the best way to move forward with the Social Security System and law that we now have.  I look forward to working with Congress and the States on creating a Social Security System that will be able to meet the needs of our people, without further straining the financial crisis of the private sector.”