History

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History

Late 60s and 70sThe 80sThe 90s2000-20092010-Present
1968

Social Security program was established.

1969

Coverage extended to agricultural workers and self-employed with employees.

1972

Earnings Test enacted.

July 1, 1973

Increased quarterly taxable wage from $750 to $900.
Coverage extended to self-employed with no employees provided annual business gross revenues
are over $10,000.
Temporary workers covered.
Members of religious organizations covered.

July 1, 1974

Disability program established.
Extension of surviving child’s benefits beyond age 21 if disabled or incompetent.
Increased monthly benefits by 25% with minimum from $10 to $20.

July 1, 1975

Disability program established.
Extension of surviving child’s benefits beyond age 21 if disabled or incompetent.
Increased monthly benefits by 25% with minimum from $10 to $20.

July 1, 1975

Increased benefits by 20% with minimum from $20 to $24.

July 1, 1976

Increased quarterly taxable wage from $900 to $1,200 and tax rate from 1% to 1.5% (employee’s share plus a matching 1.5% from employer).
Increased quarterly earnings test from $100 to $200.
Changed benefit formula and general increase in benefits with a minimum of $26.40.

January 1, 1977

Spouse’s share increased from 50% to 60% and children’s share from 10% to 15%.

July 1, 1980

Increased tax rate from 1.5% to 2% employee’s share plus a matching 2% share from employer.

February 8, 1983

P.L. 2-74 enacted establishing the FSM Social Security Administration.

October 1, 1984

Maximum taxable wage increased from $1,200 to $1,500.
Minimum quarters of coverage required for fully insured status increased from 8 to 12 quarters
Currently insured requirements changed from 6 quarters of coverage to 8 quarters in the most recent 13-quarter period.

June 30, 1985

Increased tax rate to 2%

July. 1, 1985

Increased tax rate to 3% employee’s share plus a matching 3% from employer.

August 1987

Second Regular 1988 Board meeting held in Pohnpei for adoption of “Transition Accords of 1987”, adoption of TTPI Personnel manual, and adoption of TTSSS pay plan.

December 29, 1988

Enactment of P.L. 5-120 (“The Technical Amendments Act”).
Increased penalty for delinquent employers from $250 to not more than $1,000 per quarter.
Provided a lien for Social Security, having priority over all other claims and liens for other taxes, including gross revenues and income taxes.
Provided changes to allowable investments.

July 1, 1990

Increased tax rate for employer-employee share from 3% to 4% each.
Penalty per quarter changed to 10% of tax due up to a maximum of $1,000.

January 8, 1991

Enactment of P.L. 6-111 (“The Social Security Investment Act”) which defines fiduciary
duties and expanding the scope of allowable investments.

December 11, 1992

P.L. 7-119 enacted allowing surviving spouse to receive retirement benefits if higher than surviving spouse’s benefits.
P.L. 7-120 enacted establishing an optional lump sum payment to individuals not fully insured who reach retirement age.

July 1, 1993

P.L. 7-118 took effect changing the benefit formula.
Taxable wages increased from $2,000 per quarter to $3,000.

June 30, 1995

Increased tax rate to 4%

July. 1, 1995

Tax rate increases to 5%

April 17, 1996

P.L. 9-56 enacted removing currently insured status requirement to qualify for disability benefits.

August 1999

Database system upgraded from Focus to FoxPro 2.6.

June 30, 2000

Increased tax rate to 6%
July 1, 2000
Increased tax rate for employer-employee share from 5% to 6% each. (PL 2-74, Chapter 4, Section 401-402)
December 10, 2002
P.L. 12-51 enacted authorizing disclosure of records of tax information between the FSMSSA and the Department of Finance and Administration
February 17, 2003
All retroactive payments for retirement and survivors benefits are limited to twelve (12) months and disability benefits are limited to twenty four (24) months. (PL 12-76, Section 3, Section 801 of Title 53, FSM Code)
July 1, 2003
FSMSS Regulations No. 2 Regulations for: Benefits, Evidence, Tax, Board & Administration Duties, And the Appeal Procedures
October 1, 2003
FSM Social Security Database System upgraded from FoxPro 2.6 to FoxPro 9 to allow FSMSSA to more efficiently enter and track data, manage claims and benefits, and generate improved statistics
August 2005
Increased quarterly taxable wage base from $3000 to $5,000 per quarter. (PL 12-76, Section 1, Section 603 of Title 53, FSM Code)
November 8, 2005
P.L. 14-37 passed to (1) Grant the FSMSS Board of Trustees the power to waive interest on delinquent accounts, (2) Allow surviving spouse and children who are eligible for two benefits, to receive the higher as a monthly benefit and to lump sum the lower equal to 4 % of the wage earner’s cumulative covered earnings, and (3) Mandate that if a foreigner resides abroad when retired, will receive a one-time payment equal to the total amount contributed into the FSMSS Program.
November 8, 2005
P.L. 14-37 passed to (1) Grant the FSMSS Board of Trustees the power to waive interest on delinquent accounts, (2) Allow surviving spouse and children who are eligible for two benefits, to receive the higher as a monthly benefit and to lump sum the lower equal to 4 % of the wage earner’s cumulative covered earnings, and (3) Mandate that if a foreigner resides abroad when retired, will receive a one-time payment equal to the total amount contributed into the FSMSS Program.
October 23, 2006

P.L. 14 – 86 created to further amend title 53 of the Code of the Federated States of Micronesia, as amended.
Change currently insured requirement so that an individual would need 20 quarters out of the 25-quarter period ending with the quarter in which a person dies, retires or becomes disabled;
Foreigners to be paid in lump sum payments equal to their total contributions once they decide to leave the FSM permanently
Allow for FSM citizens working abroad and outside of Palau and Marshalls to make voluntary contributions to the FSMSSA at a rate of 12% (both employee & employer shares) of $1,250 per quarter or 12% of $5,000 per year to earn the right to benefits;
Allow for self-employed individuals earning less than $10,000 to make voluntary contributions to the FSMSSA at a rate of 12% of $1,250 per quarter or 12% of $5,000 per year to earn the right to benefits.
January 1, 2007

On January 1, 2007, the following provisions from P.L. 14-86 became effective:
Puts 55 years of age limit on wage earners adopting children so all children adopted after December 31, 2006, by a wage earner who is 55 years of age or older would not be eligible for survivors benefits;
Puts a minimum contribution requirement of $2,500 for a person who retires or dies after December 31, 2006 and also puts a minimum contribution requirement of $1,500 for a person who becomes disabled after December 31, 2006;
For benefit payments that begin on or after January 1, 2007, will be calculated on an annual basis of 16.5% of the first $10,000 of cumulative covered earnings, plus 3% of cumulative covered earnings in excess of $10,000 but not in excess of the next $30,000, plus 2% of cumulative covered earnings in excess of $40,000 but not in excess of the next $262,500, plus 1% of cumulative covered earnings in excess of $302,500;
Raises minimum monthly benefit from $50 to $75
January 1, 2008

On January 1, 2007, the following provisions from P.L. 14-86 became effective:
Increase quarterly taxable wage base from $5,000 to $6,000 (Public Law 14-86)
March 6, 2009

Congressional Bill No. 15-52 became law and amended Title 53 of the FSM Code
Clarify the definition of employer;
Impose criminal penalties on an employer for intentional failure to pay ss tax and identify the chief financial officer of the different levels of government as the individual liable to the program;
Give FSMSSA additional options in executing lien for taxes;
Foreigners to be able to receive their lump sum only upon attainment of age 60 along with being fully insured;
Allow FSMSSA to invest in BBB grade bonds;
Allow international investments through American Depository Receipts;
Change the percentage of market value of fund that can be invested in any one industry group from ten to twenty-five.

Click on the link for a copy of the law (Public Law 15-73)

January 1, 2010

The following provisions of Public Law 15-73 became effective on January 1, 2010

To qualify for retirement and death benefits, a worker must earn at least 50 quarters of coverage along with the existing $2,500 minimum contribution requirement;
To qualify for disability benefits, an individual must earn at least 45 quarters of coverage along with the existing $1,500 minimum contribution requirement and must also be currently insured;

October 1, 2010

The following provision of Public Law 16-10 became effective on October 1, 2010

The FSM Social Security Tax Rate is increased by 1% on both employer and employee contributions, which now has the total rate of 7% per contribution.

January 1, 2011

The following provision of Public Law 16-10 became effective on January 01,2011

The FSMSSA New Retirement Age is defined in the following terms: -If a fully insured wage earner turns 60 on or after January 01, 2011, he or she will become eligible for 50% of his or her retirement benefits with the option of continued employment excluding earnings test adjustments.
-When the new beneficiary (receiving 50% retirement benefits) reaches 65 years old, he or she will become entitled to 100% of his or her retirement benefits, although earnings test adjustments will apply if the person works.

January 1, 2012

The following provision of Public Law 16-10 became effective on January 01,2011

Public Law 15-73, Section 804 provides that effective January 01, 2012 the minimum monthly benefit shall increase to $100.

January 1, 2013

The following provision of Public Law 16-10 became effective on January 01,2011

Public Law 16-10, Section 901: Employee’s Tax rate shall increase to 7.5% effective January 01, 2013…
Public Law 16-10, Section 902: Employer’s Tax rate shall increase to 7.5% effective January 01, 2013…
Public Law 16-10, Section 603: Maximum Taxable Wage Base shall increase to $7,000 effective January 01, 2013.
Public Law 16-10, Section 603: Maximum Taxable Wage Base shall increase to $8,000 effective January 01, 2018.