Category: Press Releases

The FSM Social Security Administration wishes to invite all interested FSM citizens working abroad to participate in the program. Public Law 14-86, which was passed on October 23, 2006, created a new provision within the social security law that would allow a citizen of the FSM working abroad to voluntarily contribute into the system to earn the right to benefits. FSM citizens who are actually working outside of the FSM, Palau or Marshalls can make voluntary contributions. If you are interested to apply, you may find the enrollment forms on our website at www.fsmssa.fm and fill them out. Once these forms are filled and sent to the main office for processing, the citizen only has to worry about feeding his or her savings account, so there would be enough to contribute from. After every transaction, a receipt will be sent to the contributor while the bank documents the transfer in the contributor’s passbook. Voluntary contribution for citizens working abroad through the ACH program is even a better option for the citizen running business as sole proprietor, since the individual is paying as if he or she is self-employed (14% not 7%), this way one could contribute enough to become fully insured in no time at all.

Who is Eligible to apply?  

A person who is self-employed or working outside of the FSM, Republic of Palau, and Republic of the Marshall Islands may voluntarily contribute to the Social Security system under certain circumstances and receives quarters of coverage and accumulate payments to their minimum contribution requirements. It applies also to FSM citizens now. For persons who are self-employed sole proprietors with no employees in the FSM, which can include farmers and fishermen, and who make less than $10,000.00 per year, may make contributions to the Social Security System. The person will be deemed to make $1,250.00 per quarter, and they must pay the employee and the employer’s share. After January 1, 2013, the payment is $93.75 for the employee’s share and $93.75 for the employer’s share, totaling $187.50 per quarter. Any self-employed person electing to make such voluntary contributions must file quarterly returns and is subject to the same deadlines as any other taxpayer. If revenue received by a self-employed person is $10,000.00 or more, they are subject to the regular mandatory contribution provisions. For persons who are self-employed or regular employees outside of the FSM, Republic of Palau and Republic of the Marshall Islands, they may make voluntary contributions to receive quarters of coverage and to accumulate payments to their minimum contribution requirements, even if they are contributing to another Social Security system. The person must make payments to FSM SSA in the FSM, and file a quarterly return. Any person making these voluntary contributions is subject to the same deadlines as any other taxpayer. The person must also pay both the employee and employer’s share of the social security tax. The minimum declaration of earnings is $1,250.00 per quarter, but the employee may declare more earnings, and pay the tax on the earnings declared.

Voluntary Contributions for FSMSSA’s Monthly Retirement Benefits

A participant is eligible to all types of benefits, not just retirement. Moreover, you can pay social security taxes as a sole-proprietor without employees with a gross revenue below $10,000 each year and report your quarterly tax returns in the fair amount of only $187.50 in each quarter. You do not have to apply for a job, yet contribute for a better future which you greatly deserve. Without the voluntary contribution program, you would be left out of the system. The voluntary contributions allow participants to earn eligibility while residing abroad. Feel free to contact us for more information.

 

A Public hearing was conducted with Congress on May 24, 2017 at 2:30 p.m. at Palikir, where FSM Social Security Administration was tasked to present its Financial Statements to the Committee of Health and Social Affairs. Present on our behalf were Trustee Sana, Administrator Narruhn, new nominee for the Board Kohsak Keller, Comptroller Dayao and Tax Admin. Officer Jonas. The chairman of the committee Senator Ferney S. Perman was present alongwith Vice Speaker Moses, congress Counsel Catherine,  Yap Delegate Congressman Urusemal and a delegate of Chuuk, Senator Konman. Present also was Mr. Belsasar representing office of the President. At its onset, Chairman Perman welcomed everyone to the new facility and suggested that they began discussion with the new FSMSSA Board of Trustee nominee Mr. Kohsak Keller, then moved forward. A question was raised from the committee Chairman regarding how a Board member was selected and the response to that was, “it was a selection of the FSM President.” Keller stated that upon a conversation with His Excellency Christian, the subject got his interest and he did what was advised after sharing his experience in his field of work in the previous years. Mr. Keller himself shared his interest in the vacancy as a Board Member, so he became the nominee for the national government representative for the FSMSSA Board of Trustees. He stated his wish to support the system in terms of Actuarial for example and do the job as a Board member. The hearing continued with FSMSSA’s financial statements presentation which was given by Administrator Narruhn. Administrator did an overview of the system, shared updates on management and touched on claims as well. In the table below, you will find its financial statements as of the presentation. The committee was well informed about the status of the system and clarified on some subject matters they were not really sure about. It was great they managed to exchange thoughts and ways to support the FSM Social Security in terms of services to all old, current and living beneficiaries. The hectic exchange of thoughts and comments went well. There were no promises that the contribution will either keep coming or stop, but there are dedicated members who understood the need that FSMSSA has had. With all said and done, Chairman Perman thanked FSMSSA for responding to their request upon the public hearing and wished everyone for the best in the working together process. He then closed the hearing by thanking everyone present for allotting time for such important matter.

	Unaudited 2016	Audited 2015	Audited 2014	Audited 2013
Revenue	$18,661,514	$17,694,147	$17,714,633	$17,321,187
Appropriation from National Government	$1,0000	$2,0000	$1,0000	$1,0000
Total Revenue	$19,661,514	$19,694,147	$18,714,633	$18,321,187
Benefits	$19,906,488	$19,240,092	$18,985,730	$18,431,757
Administrative Expenses	$1,173,750	$1,208,147	$1,121,569	$1,153,150

FSMSSA Board of Trustees held its 2nd Regular meeting of the year beginning April 28-29, 2017. The Board of Trustees’ meetings usually took place in the four states interchangeably, for the need of appeal case hearings and other businesses relating to the system’s needs. This quarter’s meeting was held in Pohnpei as the need to appeal hearings arose. The present Board members included Chairman Jack Harris representing Pohnpei State, Vice Chairman Vincent Tafileluw of Yap, representing Chuuk State Trustee Nakama Sana and Ex-Officio member Administrator Alexander R. Narruhn. As of date, Kosrae and National Government representatives are both vacant. Other attendees included Deputy Administrator and  investment consultant Daniel Roland, Managing Director of Raymond James. Consultant Roland was present for the investment review for FSMSSA, where he presents to the Board the status of the program financially and advised on money manager’s statuses and so forth. He did updates on these managers to make sure the program is in good hands regards to its finances. The Board as well entertained four pending appeal cases during its meeting. They then had the chance to come to their conclusions on each case. With the process, the appellants appeared in front of the Board to deliver their testimonies including some questioning from the Board members and with all the information gained and gathered, finally they could make decisions on the cases either to hold, deny or uphold decisions. This time the cases were taken care of and the meeting moved forward with reports and updates from the Admin. In its financial reports, Comptroller Tessie Dayao provided the presentation based on a comparison of two years 2015 vs. 2016. At the year ending 2016, net asset stood at $50,291,125 with a difference of $570,633 compared to 2015 which was $49,820,000. This amount consisted of 89% of the investment market value which is $44,818,947 and 11% consists of the accounts receivables and other accounts. Liabilities reduced at $181,000 which consists of payables to vendors, payroll liabilities and payables to beneficiaries.  As for collections $18,638,211 is an increase of 5.5% in 2015 with $17,674,000. The reason for the increase was based on an analysis made, which included the more new employers currently paying into the system compared to the previous year, meaning employers were paying more on their taxes that time. The second factor in the increase in collection of delinquent quarters increased by 90%. The 5.5% growth rate of 2016 may not be sustainable. Collections for first quarter 2016 increased, yet compared to first quarter 2017, it was flat, no increase. It was $4,660,000. there were new employers in 2016 that contributed about $16,000. Benefits increases by 3.5% to 19,906,488. the growth rate is 3.5% as compared to the previous year of 1.3%, so benefit is getting higher again. Total number of beneficiaries increased as of 2016 which equals to 6,473.  Admin expense was reduced by $34,397 or 2.8% reduction. The Board was again updated on the financial status of FSMSSA and the meeting carried on. In conclusion, the Board members each shared their remarks from their respective states including concerns from their people. Chairman thanked everyone for the effort in making to the meeting and appreciated all the work done throughout the hectic days.

 

    Jack Harris, Chairman, Board of Trustees, FSM Social Security, accompanied by FSMSSA Administrator Alexander Narruhn, and Daniel Roland, Managing Director of Raymond James, investment consultant to FSMSSA, conducted a series of due diligence review meetings at the home offices of service providers in the U.S. Visited were three of the investment advisors currently retained by FSMSSA; the FSMSSA investment consultant; and, the consulting actuary. The due diligence visits were held from Friday June 2, 2017, through Tuesday, June 6, 2017 and was convened at the Oakland, California offices of Adelante Capital Management (ACM). ACM has managed a Real Estate Investment Trust (REIT) portfolio for FSMSSA since 2015. In attendance from ACM were Michael Torres, CEO, Adelante Capital Management; Jeung Hyun, Portfolio Manager, Adelante Capital Management; and, Thomas Budinger, Vice President, Adelante Capital Management. A number of issues were discussed, including the historical performance of the FSMSSA Trust Fund account managed by ACM; the future outlook for REIT’s; and, among other things, the status of ACM as an ongoing firm. Mr. Roland questioned why since 2008, firm assets had declined substantially. The ACM’s response was that it was directly a result of the 2008 global financial crisis and the resulting flight to safe havens, such as bonds. In ACM’s case, it was exacerbated by their client base being highly concentrated in large public funds. They also met with Tortoise Capital Advisors, LLC ((TCA), whom has managed a Master Limited Partnership (MLP) portfolio for FSMSSA since 2015. As with ACM, the review began with a presentation on historical performance, and the outlook for the future. The fact that MLP price fluctuations were wildly disproportionate to their underlying valuations based on cash flow was discussed in-depth. It was noted that the prices more recently have been highly correlated to spot oil prices, and not reflective of the underlying yields and future income growth. TCA mentioned that large institutional investors had been adding to their MLP exposure since the steep drop in prices. The next sets of meetings held were with Robert Burns, Director, Institutional Consulting Services; and, Griffin Suit and Jake Norris of Asset Management Services. They addressed the performance reporting, asset allocation and investment manager research functions they are responsible. Of key concern to the Administrator were the occurances in custody reporting with respect to following month adjustments. Mr. Burns indicated that this would occur, infrequently, when correcting data was received after statements were generated. Possible scenarios to address this were discussed, to include delaying statements for several days, as well as upgrading reporting to the Clearwater System. Finally, on Tuesday, June 6^th, a due diligence meeting was held with Jonathan Cangelosi, Principal, of Golden Capital Management (GCM). GCM has managed small/mid cap equity portfolio for FSMSSA since 2008. After addressing performance of the portfolio, which was deemed acceptable, the discussion centered about the possible effects that might occur due to the purchase of the remaining shares of Golden Capital not only held by Wells Fargo. Mr. Cangelosi was insistent that there should be no negative impact as all principal investment professionals were tied to the firm by contract, and that Wells Fargo had no intention of involving itself in the investment management process. The rest of the meeting was discussions with the actuary, Joe Nichols, about cost statements needed for the upcoming proposed legislation and ways in which the benefit formula can be amended to help place the fund in a more sustainable state. They as well discussed the contract and timing of the next actuarial valuation and an experience study, which its main function is to examine the mortality experience of FSM and from that, to build the mortality table used in their calculations.  At the conclusion, the Chairman made it clear that FSMSSA would continue to watch developments closely.

 

Administrator Alexander R. Narruhn and Deputy Administrator Francky Ilai  attended  the Asia Pacific Association for  Fiduciary Studies (APAFS), a non-for-profit educational and charitable association dedicated to helping fiduciaries to gather, grow, and protect assets being managed by providing the education to make better investment and business decisions. Its flagship event, the Pacific Region Investment Conference (PRIC), is widely considered a premier event in the Asia-Pacific region for fiduciaries seeking insights from industry experts from around the globe and building a network of like-minded professionals. Upon attending APAFS this year, FSMSSA recognizes Administrator Narruhn for achieving his certification of Master AIF and for currently being a member of Board of Governor’s on APAFS. Moreover, recognition also goes out to Deputy Ilai for his AIF Designation, which he had passed with an overwhelming success.  With the more knowledge and skills gained, FSMSSA  trusts in its longevity.  Congratulations Gentlemen for the success, which is believed to be a benefit to the system and its people.

Beginning December 12, 2016, FSMSSA held its one week Biennial Conference in Pohnpei at the Headquarters Office. The purpose of the biennial conference was mentioned in the welcoming remarks by the out going Chairman of Board of Trustees; Nakama Sana. He stressed the purpose of the conference as to again educate, recall, update and learn more about FSMSSA operations. This year’s conference was indeed productive to all FSMSSA staff, for a lot of information were shared and learned through presentations from many of the staff, which made it a very interesting one to many. As mentioned by many of the staff through discussions, this year’s conference came out better than the previous ones due to the specific topic presentations touched specifically on all program divisions. The five day of hard work listening, discussing, and obtaining information came out very educational to all FSMSSA staff and administration. Presentations were given by Administration, branch managers, division heads, branch members and HQ staff. Various topics were presented specifically inclusive of claims, accounting, tax, operations and information. For instance, the claims division specified on all types of benefits offered at the program which included disability, survivor, retirement,  and lump sum. The most helpful part of the conference came about when questions were raised after each presentation for better understanding and clarification especially for the new employees. It was indeed a benefit to all, refreshing mind of long time employees and helpful to those who were first timers.

The uniqueness of the conference this year was that Administrator Narruhn intended that all staff prepare and deliver a presentation in order for them to get used to program functions, as well a great development  for their own benefits now and then.  At its finale, FSMSSA concluded by celebrating the happy season together as one post under its umbrella, and enjoyed Christmas joyously.