Competent people-the key to MISSA’s top notch performance in the past decade Posted 3/28/10
Over the past decade, the public has seen the remarkable transformation of an organization that has gone through serious financial distress in the past, and the figures speak for themselves:
Contributions grew almost two-folds, from $6.5 million in FY 1999 to $12.6 million in FY 2009;
Benefits paid increased from $7.4 million in FY 1999 to $13.6 million in FY 2009
Our net assets are up by 87.24% from FY 1999 ($35.0 million), now valued at $65.5 million as of December 31, 2009;
MISSA’s funded accrued actuarial liability rose almost two-folds, from 15% in 1999 to 29.5% in 2006, and 28% in 2008;
Offshore investment gains since a new investment advisor and custodian were hired in late 2002 totaled $21.8 million, with an annual average net internal rate of return of 8.9%;
Monthly benefit payments averaging $1.1 million are consistently made on time and continuously been enjoyed by about 3,775 beneficiaries.;
Administrative expenses were consistently kept at sparing levels and within the approved budget, not exceeding 8-9%% of total revenues. By law, MISSA is allowed to use up to 20% of total revenues in administrative expenses.
MISSA has not made a single withdrawal from our trust fund in nine years. Instead, we generated cash surpluses which were subsequently invested;
The MISSA Board of Directors, Management and staff continue to gain the trust and admiration of the public for their continuous quest for accountability good governance and transparency;
MISSA received clean and unqualified audit with “no findings” from its external auditors in the last eight (8) consecutive years.
Our redoubled efforts to collect more contributions through house to house visits, payroll audits and legal actions have significantly improved tax compliance, although MISSA is behind its targeted level of 90% compliance rate;
Our employees, who are always on the forefront of all our successes, have earned recognition for their operational efficiency and dedication to their jobs. This is a clear reflection of good leadership and effective supervision;
We became much closer than before to our regional counterparts, the FSM and Republic of Palau Social Security Administrations, and with our collaborative efforts, have made considerable progress in improving the social security system in Micronesia.
Ten years ago, the Administration was faced with a grueling task that during that time seemed unachievable - to put back social security on a sound financial footing.
Today, MISSA is a much stronger and more financially stable organization and it is determined to improve further for its beneficiaries and the people of the Marshall Islands.
Fiduciary responsibility of the MISSA BOARD
As the steward of the country’s Retirement Fund, the Board practices prudent fund management by keeping the growth of its benefits payments, operating and administrative expenses at sparing levels.
The Board has adopted corporate governance principle aimed at ensuring that all the members are independent from third party intervention and pressure, be it political or personal in nature.
As fiduciaries and trustees of the Retirement Fund, the Board is aware of its duty to ensure that the Fund remains financially viable and its assets and stability remain protected from what some may perceive to be self-serving and/or politically motivated agenda on the part of a few.
The Board has put more emphasis on ensuring that the Marshall Islands Retirement Fund is transparent and complies with disclosure requirements. It understands the importance of keeping all beneficiaries, contributors and the public fully informed of relevant developments to avoid negative perception often based on unfounded information.
Extraordinary performance by ordinary employees
Our employees, from the Administrator to our lowest ranking staff and their immediate families who remain supportive through the years, are likewise responsible for MISSA’s success in the past decade. They and the MISSA Board are, and always will be, our greatest assets. Getting the right people is not easy. Although MISSA has the luxury of choosing from hundreds of applicants who graduated from high school and a local community college, most of them do not have the academic background, work experience and skills required of the osition(s). However, this lack of qualified candidates is compensated by the rigid recruitment process that MISSA adopts. Thus, MISSA has been able to pick the most qualified and trainable applicant(s).
Except for the CFO’s post, MISSA’s current workforce of 30 employees is comprised of 29 Marshallese whose skills and competence are undoubtedly proven. This shows that local employees, if given the right supervision and training, coupled with sound policies and procedures, could also become efficient workers and perform at par with non-Marshallese workers.
Strong legal support
One distinct advantage that MISSA has over the other agencies is the strong legal support that the Administration receives from its legal counsel.
With the ever increasing benefit payments outpacing collections in recent years, MISSA has to find other ways to maintain a positive cash flow. Otherwise, it will resort to dipping into its Trust Fund to ensure uninterrupted payment of benefits averaging $1.1 million every month and another $1.0 million in administrative expenses every year.
With the help of its legal counsel, MISSA was able to step up its collection efforts that resulted in partial and full settlement of old debts, either amicably or through court orders. In FY's 2008 and 2009, MISSA was able to collect about $2.1 million and another $1.3 million is expected to be collected this fiscal year out of these old-outstanding receivables.
Employee code of conduct
MISSA employees are constantly provided with information, verbally and in writing, about working conditions, employee benefits, acceptable conduct in the workplace and how the Administration generally relates to the employee. It is the hope of management and the Board that by providing the employees with such information, not only will it allow for an environment conducive to both personal and professional development, but ultimately, lead to the efficient operation of the Administration.
Tribute to former Board Members and employees
The Administration’s successes in the past decade would not have been achieved without the significant contributions and dedication of certain individuals who worked with but are no longer connected with MISSA, more particularly the following former Board Members:
Grant Labaun (Board Chairman 2000-03), Tommy Milne (Board Member 2000-03, Vice-Chairman 2003-09), Biram Stege (Board Member 2000-06), and Cradle Alfred (Board Member 2000-09)
After being appointed by then President Kessai Note and his Cabinet in 2000, the newly reorganized MISSA Board comprised of Grant Labaun, Jack Niedenthal, E. Tommy Milne, Maria K. Fowler, Biram Stege, Saeko Shoniber and Cradle Alfred, faced a daunting task and successfully prevailed over the difficult challenges the Administration faced during its most turbulent years. It was during their term (from 2002 and onward) that MISSA, boosted by then newly installed Administrator, Saane K. Aho and newly hired Chief Accountant, Alice Sanchez, became fully auditable and accountable, increased revenues via the institution of aggressive tax collection policies, drastically decreased expenses and streamlined the operation of the Administration.
Suzanne Murphy Chutaro, (Board Member 2003-2006), Jeffrey Barton (Board Member 2006-2009)
When Chairman Grant Labaun and Board Member Biram Stege ended their terms in 2003, then President Kessai Note and his Cabinet appointed Jack Niedenthal as the new Board Chairman and Suzanne Murphy Chutaro and Jeffrey Barton as new Board Members Despite her young age, it did not take long for Suzanne to get familiar with her role in the MISSA Board and feel the urgency of carrying on the reforms initiated by the incumbent Board. During her term, Suzanne actively participated in the board’s quest to control benefits and operating expenses at sparing levels despite constant attempts by certain parties to use the Retirement Fund for other purposes.
Board Member Jeffrey Barton played a key role in MISSA’s enjoying a healthy cash flow during his term. As the country’s Secretary of Finance, he made sure that the RMI Government consistently paid its bi-weekly remittances to MISSA. As the top contributor, any single late or non-payment of the RMI Government poses great risk to MISSA’s cash position.
Lillian Andrew, Admin. Asst., Deputy Administrator 1987-2007
Mrs. Andrew started as Administrative Specialist of the then newly established Marshall Islands Social Security Administration in 1987. In 1991, she was promoted to Operations Officer and became the Deputy Administrator for Retirement Fund in 1993. During her 20 years of service, Lillian has literally reviewed almost all the claims of the more than 3,200 existing beneficiaries of MISSA and several hundreds more that have been permanently closed already. In 2007, she retired and joined the thousands of Marshallese retirees she once selflessly served for 20 years.
Alice Sanchez, Chief Accountant, CFO 2001-2006
The hiring of Alice in 2001 was the turning point to MISSA’s reaching its primary objective of ensuring accountability of its financial records. With the help of her accounting staff and auditors of Deloitte & Touche, Alice was able to fix MISSA’s books that were in disarray for several years. Subsequently, the audited financial statements from FYs 1997 through 2000 were released and all audit findings were cleared and resolved. Alice’s five-year stint with MISSA has set a record that is difficult to match. For five consecutive years (2002-2006), the auditors indicated no audit findings in their audit of MISSA. Alice and her family are now living in the United States.
Harden Lelet, Ebeye Branch Manager 2004-2008
Harden’s four-year stint with the Administration was the turning point in MISSA’s getting back the trust and confidence of Ebeye’s traditional leaders, local government officials, employers and the public. Because of his eloquence in public speaking and intrapersonal skills, he became a well-known personality among the locals and was able to reach out to the public and disseminate MISSA’s tax regulations and its benefit programs.
In 2008, Harden accepted an offer to be the new Ombudsman between the RMI workforce on Kwajalein and Kwajalein Range Services (KRS). KRS is one of the two main contractors at USAKA.
KOMOL TATA TO ALL OF MISSA’S FORMER BOARD MEMBERS AND EMPLOYEES!