The Marshall Islands has fired giant U.S. firm, Salomon Smith Barney, over losses sustained by the country's social security investments.
The Social Security board of directors says the U.S. company lost 5.3 million U.S. dollars last year from the social security investments and substantial losses have been incurred this year.
A recent report on the Marshall Islands retirement fund said that it has about 35 million dollars in assets and a liability of 218 million dollars in future benefit payments due to its members.
This means it has only 16 percent of the funding needed for its retirement liability.
Social security administrator, Saane Aho, says the board has approved a totally different investment strategy and plans to reduce risks.
Ms Aho says they've replaced Salomon Smith Barney with a small Florida-based company called Investor Solutions which offers a passive investment philosophy.
She says the company, which is owned by Frank Armstrong, charges lower fees and it buys a diverse portfolio that reflects the entire market in order to minimise losses.