A Bill and a Resolution Awaiting Congressional Action

The FSM Social Security Administration has a bill and a resolution pending with the 14th FSM Congress.
The bill was proposed by the FSMSSA and was signed and transferred to congress by the FSM President on August 4, 2005. The bill’s intention is to improve the FSMSSA’s tax collection methods and to reduce the system’s unfunded liability.
In the bill, Section 603 has a new segment that makes it a claimant’s affirmative duty to disclose to the FSMSSA all earnings. This section further clarifies the nuances pertaining to employment that is taxed by the FSMSSA.
Section 605, will amend the law to allow the FSMSSA to recover benefits wrongly paid, to collect all attorney’s fees on all actions for payment, and allows the board to waive interest payments to increase their ability to recover money from delinquent taxpayers.
The bill also modifies Section 801 to clarify that it is the responsibility of the claimant to provide a complete application for benefits and the FSMSSA is given the right to deny benefits for failure to do so.
Another amendment, made to Section 804, makes it clear that the calculation of retirement and disability benefits is made solely on earnings made from covered employment.
The proposed bill presents a new section into the lump sum benefits. Currently, if an individual is eligible for two benefits, he or she has to choose the benefit that is higher in amount and not both. For instance, if a surviving spouse retires and she is eligible for survivor benefits based on the deceased spouse’s earnings, and in addition, is also eligible for retirement benefits based on her own earnings, she can only receive the benefit that is higher in amount. So, if the survivor benefit that she is eligible is more than her calculated retirement benefit based on her earnings, she will receive only the survivor benefit. The amendment will allow this surviving spouse to file for a lump sum of the lesser benefit equal to two percent.
The same applies to surviving children. Currently, if both parents become deceased, the surviving children will only receive the survivor benefit that is higher in amount. The amendment would allow the children to lump sum the other benefit equal to two percent minus any benefit amount received by the deceased wage earner, if any. A change to Section 807 directs that the only individuals eligible for these benefits are citizens of the Federated States of Micronesia, the Republic of Palau and the Marshall Islands.
Section 809, which directs how benefits are administered to foreign citizens, is also amended within the bill. The amendment will make it so that foreign citizens, except those of the Republic of Palau, Republic of the Marshall Islands, and the US, will receive benefits in lump sum payments.
On August 3, 2005, the FSM President, Joseph J. Urusemal, submitted to the 14th FSM Congress, a resolution for the ratification of the Social Security Totalization Agreement. The agreement was jointly created by the social security administrations of the Federated States of Micronesia, the Republic of Palau and the Republic of the Marshall Islands. The agreement is the manifestation of the three administrations’ efforts to work together to provide retirement benefits for individuals who have worked in more than one of the three countries. Today, there are workers who are not eligible for retirement benefits because they do not meet the fully insured requirement under the rules of any one nation. The intent of the agreement is to allow an individual to apply for retirement benefits on the basis of their employment in more than one country. This means that an individual can attain fully insured status by combining quarters worked in these three countries and therefore qualify for retirement benefits. Once a person is approved by the administrations to receive retirement benefits, based on the combined quarters, he or she will receive benefits that will be paid out by each country in which they worked, in a pro rata share. Ultimately, the agreement encourages citizens of the three participating countries to work in any one of them with the promise that employment records from these three nations can be combined to grant an individual right to retirement benefits. The agreement does not apply to other benefit types such as disability. Promulgation of this agreement in the FSM is slated to begin as soon as it is ratified by Congress. The agreement has been signed by the presidents of the other participating countries and is awaiting congressional ratification as well.

Posted on 09/06/2005.

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