Educating & Ensuring Social Security Benefits for all working citizens.
The FSMSSA Board of Trustees held 2nd Regular Meeting in Chuuk on May 22-23, 2019. Every of these board meetings are held quarterly in and around the four states, as there may be a need to follow on pending appeal cases. With such matter, every quarter a Board meeting is called and inclusive of a special meeting when necessary. In attendance to this meeting were Chairman Harris, Vice-Chairman Tafileluw, members Sana, Nena, Falcam, Administrator Narruhn as Ex-Officio member, Deputy Administrator Ilai and FSMSSA Internal Auditor Win Thomas.
The Board were updated on FSMSSA division reports, mainly Financial and Tax Reports. The financial report specifies its net assets standing at $53.2 million as of March 31, 2019. Of this amount $48.6 million is accounted for the investment market value. The remaining $4.6 million represents cash, accounts receivables, travel advances, fixed assets and other assets. Liabilities of $148,031 include accounts payable to vendors, payroll liabilities for unremitted taxes, and payable to beneficiaries. Revenue grew by 5.7% to $5.0 million compared to $4.70 million in the same period last year. The increase is attributed mainly to the timing of Government bi-weekly payment in particular the Pohnpei State and Yap State which paid most of their 4th quarter 2018 taxes due January 2019. Benefits grew by 1.7% to $5.5 million compared to %5.4 million in the same period last year. The increase benefit is attributable to new claims and from retirees’ eligibility back to 100% of benefits. Administrative expenses amounted to $264,556 which represents 20% of the approved budget of $1.31 million. In March 2019, $1.0 million has been withdrawn from the investment portfolio to supplement benefit payments. Cash flow shows the actual sources and uses of cash. Collections were not enough to pay benefits and administrative expense, hence a cash deficit of $764,494. The cash deficit was funded by withdrawal of $1.0 million from investment trust fund.
Tax collection remains a challenge the program tackled with every day following its regulations on tax collection. As of 1st quarter 2019, FSMSSA’s total tax receivables was $5.2 million, which is 4% lower than the same period of last year. The major cause of this decrease has to do with lump sum payment of $254,228.83 to some companies in CY2018. The program’s tax collections struggles with out of the overall delinquent employers, $3.3 million are either closed or inactive employers. About 64% of the total delinquent tax goes to these doubtful accounts and $1.9 million goes to businesses that are still operating and are currently able to pay off or make allotments to their delinquent balance. Still partial collections had been made up to 6% as of 1st quarter 2019 and FSMSSA Tax Division continues to push for more effort in collecting from refereed accounts.
FSMSSA Board of Trustees also had taken care of old or unfinished businesses along with new businesses and had received knowledge of recent communications and incidental report from Administrator Narruhn, inclusive of Social Security Amendments, results of public hearings and pending matters needed of Boards’ attention.
Finally, pending appeal cases were deferred to its special meeting in Kosrae, June 2019.
FSMSSA Board of Trustees had its 1st Special Meeting on February 14, 2019. In attendance were all members including Chairman Harris, Vice Chairman Tafileluw, members Sana, Ned and Falcam along with ex-officio member Administrator Narruhn and Deputy Administrator Ilai. There was quorum so the meeting carried on with its Agenda. A major part of the meeting was the 2019 Investment Review, which also took place. A presentation was given by FSMSSA’s Consultant Daniel Roland, focused on the system’s portfolio performance, Investment Policy Statement (IPS) percent reduction and performances of money managers. Another presentation was on the Experience Study and Actuarial Valuation and was given by Brent A. Banister from the Actuarial Study Group. Details were to be put into report. Moreover, the board had heard and gained information needed from such crucial presentations and were now clear on where FSMSSA is heading in such areas, therefore had passed changes to Investment Policy Statement. The Board’s agenda carried on as usual, briefings and comments were made. Administrator Narruhn further discussed specific issues including money managers put on watch as well as the Valuation and Actuarial Experience study hoping for the support of FSM Congress to pending bill. Narruhn shared the ongoing projects for FSMSSA to be able to use the laser printer and software upgrade. He then discussed ongoing issue of the need to do electronic payment whereas abroad beneficiaries were being encouraged to switch to bank accounts. Lastly, as always, FSMSSA’s Financial Statement and Tax Reports were shared with the Board of Trustees to be reviewed and do communication with comments if there may be.
The need for the special meeting had been met and meeting was adjourned.
FSMSSA Board of Trustees had its 3rd regular meeting on December 3, 2018. All board members were present as well as Administrator and Deputy Administrator. It became common that every quarter, the Board meets to share updates, reports and exchange advices pertaining social security’s sustainability. It is another chance for FSMSSA Admin to update the Board of Trustees on matters or new information there may be. In return as the governing body of the program, the Board makes fair decisions for a better program. In line with the updates from Admin, Administrator Narruhn spoke of recent communications as of date. Narruhn further discussed some items in his communication, which included the progress of the lot, or office space to be provided by Pohnpei State Governor. Administrator had assisted with documents needed and asked the board to support the idea in communicating with the State Government. Narruhn assured the Board that the experience study had been finalized, and valuation first draft completed awaiting for more detail in a later meeting. Administrator shared the status of the amendments introduced with Congress last session. A major part of this regular meeting was about the FSMSSA 2019 Proposed Budget. Public Law 5-120 mandates FSMSSA to present an annual budget not exceeding 11% of projected income for the ensuing fiscal year. Administration prepared budget comparisons of CY 2018 vs. CY 2019 and presented to the Board, which was thoroughly explained in details that the Board came in meets in the end by approving the FSMSSA Proposed Budget CY 2019. The percentage of Proposed Budget was 6.9% of income projection. The Budget Ceiling of 11%, with total proposed budget of $1,311,974, a decrease of 1.0% from 2018 approved budget. The meeting continued with FSMSSA’s Financial Statement and Tax reports. The Board of Trustees were well informed that with their queries being answered, and called off a productive meeting.
The FSMSSA Board of Trustees and Administrator attended the 18th Annual Pacific Region Investment Conference, envisioned to be the premier investment conference in the region. Through this medium, Asia Pacific Association for Fiduciary Studies (APAFS™) , provided members with meaningful educational forums that cover the most current and fundamental understanding of their roles as fiduciaries, focusing on regional specific issues and needs. The goal of APAFS is to raise the level of understanding and standards of practice among fiduciaries in the region by providing educational programs and opportunities, so that they may provide the most prudent stewardship of the funds entrusted to their care. As the governing body of the FSMSS program, it had become tradition that the Board of Trustees and Administrator attend such conferences for positive and enhancing purposes in chances that kept accountable for the program’s sustainability. In attendance were Chairman of the Board Jack Harris of Pohnpei, Vice Chairman Vincent Tafileluw of Yap, member Albert Falcam-National Government representative, Chuuk representative, member Nakama Sana, and member Nena C. Ned representing Kosrae State. Along with the Board was Administrator Alexander R. Narruhn. With the information attained and knowledge gained from these conferences, FSMSSA continues to trusting in the hands of its Administration for the successes of the program through daily work of all Board members and Administration.