MISSA's financial performance in FY 2010
posted January 06, 2009
Fiscal year 2010 has been a challenging year for MISSA with collections flattening, benefit payments continuing to increase and $1 million being liquidated from MISSA’s Time Certificate of Deposit at BOMI. The Administration had expected and prepared for this cash shortage in early 2006. The recent liquidation of $1 million is the first of its kind in the last decade as MISSA has not tapped into its Trust Fund in a span of ten years. Investments faired well this fiscal year with net investment income at $5,490,636, which is an increase of 64.03% when compared to the net investment income $3,347,438 in the previous fiscal year.
As of September 30, 2010, MISSA’s total net assets held in reserve for future benefits have increased to $68,543,988.
MISSA has no debt and did not have material activity in its capital assets.
The Administration has expected contributions to remain flat this fiscal year due to effect of financial crisis both within the country and around the world. Contributions for the year totaled $13,118,836 or 2.92% higher than the budget. The RMI Government, through the Ministry of Finance, has consistently paid its bi-weekly remittances on time and its contributions declined by less than 1% this fiscal year from $3,896,499 in fiscal year 2009 to $8,816,591 in fiscal year 2010. Private contributions increased by 11.42% from $7,912,754 in fiscal 2009 to $8,816,591 in fiscal year 2010. Penalties and interest decreased from $2,073,541 in fiscal year 2009 to $428,184 in fiscal year 2010, or a decrease of 79.35% which was due to a prior period adjustment in judgment receivable made in fiscal 2009. In fiscal year 2009, there was a provision for bad debts expense of $1,278,603 that pertains to a prior year adjustment in penalties, and was shown as a direct deduction to revenues for that year. Other income has increased by 34.64% from $362,598 in fiscal year 2009 to $488,192 in fiscal year 2010.
For the year ended September 30, 2010, the fair value of MISSA’s investments in the U.S. and International markets increased by $3,384,887. A total of $1,125,405 in dividends and interest payments were received and subsequently reinvested. Investment management fees have increased by 21.3% from $104,524 in fiscal year 2009 to $126,783 in fiscal year 2010.
MISSA presently holds and 31 interest in BOMI. For the year ended September 30, 2010, MISSA’s 65,285 shares at BOMI increased in value by $828,234 representing equity earnings. Annual dividend payments of $293,783 and 293,783 were received from BOMI in April 2010 and 2009, respectively. As of September 30, 2010 and 2009, the shares at BOMI were value at $8,944,425 and $8,409,973, respectively. Furthermore, MISSA holds 3,000 shares of stocks at $10.00 par value from the Marshall Islands Service Corporation.
For the year ended September 30, 2010, benefit payments increased steadily by 6.64% to a total of $14,551,142 as compared to $13,645,174 paid in fiscal year 2009. Administrative expenses were maintained at budgetary limits, with a total of $885,294 and $972,954 in fiscal years 2010 and 2009, respectively. These amounts represented 7% of total contributions generated during these respective years. As mandated by the Social Security Act of 1990, MISSA’s administrative expenses have an allowable ceiling of as much as 20% of revenues for any given year.