1 May 2004

Marshalls to put more cash into retirement fund

7:14 am on 1 May 2004

The Marshall Islands retirement fund is preparing to invest US$750,000 in US stocks and bonds later this week, a move that will increase its total investments to US$38.2 million.

The manager of the Marshall Islands Social Security Administration, Saane Aho, says it's halted a past practice of withdrawing funds from investments, to pay retirement benefits, and has instead been investing money each year.

This has been made possible by aggressive tax collection, that's seen a rise from US$5.5 billion in 1999, to US$13 million last year, and significant reductions in administrative costs.

Mrs Aho, says funds being invested are the surplus of tax collections over the benefits being paid to retirees.

She says the administration's US investment fund, also continues to increase in value, under the management of a company, based in Florida called Investor Solutions Inc.

In addition to the investments in the US stock and bond market, MISSA maintains about US$3.6 million in income-generating account investments at the Bank of Marshall Islands in Majuro.

But Mrs Aho says MISSA is still a long way from being able to meet its long-term retirement liability, which three years ago was estimated at US$218 million.