KOROR (Palau Horizon) — Senate President Seit Andres has introduced a resolution urging the United States government to provide $500,000 in supplemental funds to the Prior Service Trust Fund. This would ensure that be the benefits of over 300 eligible Palauans may continue without interruption, Andres said.
Senate Resolution 6-85 also seeks an additional appropriation of $25 million to assure that future benefits will be paid until the Prior Trust’s obligation has been met.
“If the United States had appropriated and invested the original $15 million request, the amount would have been sufficient to cover all future liabilities under program,” Andres said.
The U.S. Congress appropriated only $8 million for the initial capitalization of the trust fund agency, but it also acknowledged that supplementary funds would be needed to refinance the fund in the future.
“In 1996, the actuarial evaluation found that approximately $15.6 million additional appropriation would be needed to complete the funding of the program,” Andres said. “However, now, the sum needed has grown to $25 million due to the loss of investment income that would have been earned had the $15.6 million appropriation been granted back in 1996,” Andres said.
The program is currently facing financial difficulties as it tries to pay the benefits of over 2,000 beneficiaries in the Micronesian region, he added.
“The Prior Trust Service Fund is currently in a financial crisis and is rapidly approaching depletion with a remaining balance below $700,000…. Without emergency supplemental funding of $500,000, monthly benefits will be interrupted,” Andres said.
The program needs an additional $25 million lump sum appropriation for the total funding of all future benefit payments and administrative costs, he added.
