FSM Social Security Administrator Unravels New Regulations

The FSM Social Security Administrator Alexander Narruhn greeted the packed Pohnpei State Supreme Court to deliver his presentation on the FSM Social Security System at 8 o’clock in the morning of February 11, 2003, and kicked off the second day of the 9th Annual Judicial Conference.
“We are here to serve… Our long-term goal is to overcome the problems the system is currently experiencing…,” stated Alexander Narruhn early in his speech and it became clear later in his speech that this statement is the underlying mission of the FSM Social Security Administration.

Mr. Narruhn started by emphasizing the importance that the FSM Social Security Administration places on educating the people about the system. This is the approach that the FSM Social Security Administration will use to introduce its proposed regulations to the public.
At this point, Mr. Narruhn turned the floor over to Steve Finnen, the FSM Social Security Legal Counselor, who explained the promulgation process of the proposed regulations. The proposed regulations, which were approved by the FSM Social Security Board of Trustees, will help fine-tune the process of applying for Social Security benefits and will be a guideline for employers in terms of social security taxation. The proposed regulations are guided by Title 53 of the FSM Code. The unofficial promulgation of the regulations was kicked off on the same day of the judicial conference, February 11, 2003.
There will be a 120-day period of implementation for the proposed regulations to permit public reviewing and the modification of the regulations if necessary. The 120-day period of implementation is necessary to give time enough for the regulations to be translated into the local languages. The promulgation or initiation of the regulations will be announced on the radio, posted on bulletin boards in the general public, and discussed in public hearings of which the dates and place will be announced later.
The floor was turned over again to Alexander Narruhn who went on to present the Financial Status of the program. As of January 1, 2002, the un-funded liability of the program totaled $139 million of which the program does not have any other resources, besides its collections in SS Tax and investments abroad. As bad as the market may seem, the program continues to maintain just about 8% rate of return of the FSMSSA investment since its inception. The contributions and benefits under the current law are not out of balance with respect to the future. It is important to know that the existing un-funded liability is not a result of current design, but is a problem inherited from the past and must be dealt with, as with any other Social Security Pension Program throughout the world. The question that leaves the FSMSSA to deal with is how to manage this current deficiency. Alexander Narruhn unveiled yet another aspect of the FSMSSA’s ongoing battle with the current situation. Public Law No. 12 – 76 increases the wage base from $3000 to $5000 per quarter, which will add another $2.5 million in revenues to the program; the program will continue to avoid amending Social Security laws in anyway that would increase promised benefits, at least at the present time and protecting future contributions, its excess amounts has to be at a priority. Another factor in resolving the un-funded liability is to ensure a stimulus plan for our nation's economy, which is underway. The health of the program depends on how we as a nation can stimulate the economy. The FSMSSA pumps in just about $9.6 million into our economy per year in benefits.
In addition to his presentation, Mr. Narruhn touched the situation that Prior Service is experiencing. If the program does not get funding, it will close down. As of December 13, 2002, the current cash available for the program was $394,000. If there is no additional funding for the program, regrettably it may close down its operations in early 2003. However, the FSM Social Security Administration is on the optimistic side and hopes that the program will get funding and will continue to work with the leadership of this federation in requesting additional funding from the U.S. Congress under the leadership of Prior Service Administrator Jerry Facey.
In a final statement that reflects his earlier claim, Alexander Narruhn concluded his speech by saying, “Although our main goal is to continue our efforts to find solutions for a better service to the citizens of the Federation, ACCOUNTABILITY AND INTEGRITY, do matters in the process. For it is on this very foundation that a sustainable future of the program will be constructed.”
After answering questions, Alexander Narruhn thanked the audience and retired.

Click HERE to download a copy of the new regulations.

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