In attendance were FSM President Emanuel Mori, Vice President Alik Alik, Chief Justice Andon Amariach, Speaker Isaac Figir and 11 other members of the 16th FSM Congress as well as the four state governors and some of the legislative leaders from the four states.
FSM Secretary of Resources and Development Secretary Peter Christian moderated the start of the conference which discussed some of the most important issues facing the nation.
All of the principals agreed that the meeting should result in progress for the states and the nation.
The governors, in particular, spoke of the need for more ways to generate revenue at the state level and to address the additional agenda items they had brought to the meeting.
Kosrae Gov. Robert Weilbacher announced that their state legislature is working on legislation to pass a partial budget for FY 2010, for only three quarters, because of a lack of revenue to fund an entire year of operations.
Mori nominated Figir to be chairman for the conference.
The first topic on the agenda was Social Security reform.
FSM Social Security Administrator Alex Narruhn, gave a presentation which showed that the FSM Social Security fund has an unfunded liability of $292 million.
He gave an overview of how the fund got into this situation, citing past contribution levels from workers 40 years ago who are now receiving benefits that surpass their contributions, and the fact that the number of workers in the FSM contributing to the fund has gone down over the years while the number of beneficiaries has gone up.
He pointed out that the fund lost approximately $10 million when the stock market crashed.
He gave an overview of the new Social Security law, Public Law 15-73, and how it would positively affect the funding of the FSM Social Security System.
This was compared to actuarial tables that showed different predictions on how long the system could last under different levels of funding, including a few that showed yearly cash infusions from FSM Congress appropriations of $2 million.
The governors described how unpopular the new law is with the people of their states.
There were also questions about the effectiveness of the FSM Social Security Administration’s investment policies and the level of funding for operations which approaches $1 million a year.
Pohnpei Gov. John Ehsa proposed infusing a larger lump sum of cash into the Social Security system this year when the four states will be realizing an increase in tax revenues from the more than $40 million worth of ongoing infrastructure projects.
Pohnpei, he added, has shown an increase in $500,000 already this year.
He said because the stock market is just beginning to recover, it is a more opportune time to invest and FSM should be putting more money now.
Other ideas were floated, like changing the type of the system altogether.
Christian said state delegations should write their recommendations so that there can be an official list of items to help direct the Social Security Administration in working toward alternative solutions and potentially amending the new law.
