21 Jan 2010

Marshalls retirement system imperiled

5:45 pm on 21 January 2010

There's a warning the Marshall Islands retirement system will be bankrupt in 12 years unless drastic changes are made to the budget structure.

The management of the Marshall Islands Social Security Administration, or MISSA, delivered the message to the government and public in its fiscal year 2009 audit.

Our correspondent Giff Johnson says while the benefit payments to retirees are exceeding MISSA's tax income from which the benefits come, there are some solutions.

"The variety of things that are on the table are things like, they could increase the tax rate which nobody seems to want to do thankfully. And then they're looking at things like decreasing benefits or increasing the retirement age when full benefits start being paid. Things like this to try to reduce the cost of the programme."

Giff Johnson says the results of the actuarial study shows MISSA investments are less than one third of what it needs for its more than 225 million US dollar liability for benefit payments to future retirees.