New Law Delays Two Provisions of Public Law 15-73

On September 30, 2009, Public Law 16-10 was passed to delay the implementation of two of the provisions found in Public Law 15-73 which was passed in March of this year.
The first delayed provision concerns the new retirement system of having individuals receive 50% of their calculated benefit from age 60 to 64 and 100% from age 65 and on. The law which created this provision had set the effective date as January 1, 2010. This new law delayed the effective date to January 1, 2011. As such, only individuals turning age 60 on January 1, 2011 and after would be affected by the new retirement system. The other delay pertains to the increase in the tax rate which had been scheduled for implementation on October 1, 2009. The effective date of this tax rate increase has been delayed by one year to October 1, 2010.
These two provisions were arguably the most controversial amendments found in Public Law 15-73 and were met with negative feedback from the public as well as the governing bodies of the nation.
The legislatures of Pohnpei State and Yap State had each transmitted resolutions to congress voicing their disagreement with the two provisions.
Further, during the Micronesian Leadership Conference that took place on September 8, it became apparent that the leadership of the nation did not believe that it was advisable to put the burden of the program’s hardships on the beneficiaries or the tax payers of the nation. During said conference, Administrator Narruhn had said that the FSMSSA looked to changing the law as a means of ensuring the system’s survival since all other routes would have been only temporary.
In signing the new law to delay the aforementioned provisions, the Vice President expressed the need for all the branches of government to jointly work on finding more enduring solutions to the challenges of the program.

Posted 10/12/2009.