MISSA Administrator meets with Kwajalein-Ebeye employers
posted 02/23/09
The Administration has now put more focus on a "reaching out" effort to increase its collections and disseminate social security information to the public, more particularly in Ebeye and Kwajalein, where about $3 million a year or 20% of the total contributions for the Marshall Islands Retirement and Health Funds are collected by MISSA.
In December 2009, the MISSA Administrator, together with Tax Managers from the Head Office and the Branch Manager of Ebeye, met with representatives of KalGov headed by Mayor Johnny Lemari.
The main purpose of the meeting was to enable MISSA to update KalGov’s filing status and determine the total amount owed to MISSA as of the end of 2008.
Although MISSA is fully aware of KalGov’s financial difficulties, the welfare of KalGov’s present and former employees remains a top priority. A number of them have already reached retirement age but are not able to retire as they lack the required number of contributions. For those employees who were lucky enough to reach eligibility requirements, the amount of benefits that they have received or are currently receiving had been reduced significantly as a result of non-payment of their contributions to MISSA.
Many more of those below retirement age stand to lose their chance of getting the right amount of benefits once they retire in the future.
In her follow-up visit to KalGov in February 2009, the MISSA Administrator stressed that since MISSA has already established a more accurate assessment of KalGov’s tax liability ($6.8 million as of February 11, 2009), Kalgov may identify main revenue sources from major businesses in Ebeye in which local taxes derived from them will be assigned to MISSA and be applied to the debt owed by KalGov. This will be covered by a mutual agreement without any legal proceeding.
More than a year ago, the court ordered a certain local government owing millions of dollars to MISSA to assign to the Administration local taxes derived from certain business on Majuro. This scheme became one of the main revenue drivers for the Administration in 2008 and helped MISSA maintain a positive cash flow.
If MISSA and KalGov can not come to a mutual agreement, MISSA will have no option but to go through the legal process that may include receivership and other legal remedies that may be necessary.
The MISSA Administrator strongly urged KalGov to take this matter very seriously and find a more definite way that will allow the debt to be paid off over a reasonable period of time.
During their December visit, MISSA’s Tax Managers, together with Ebeye’s Tax Officers also took the opportunity to visit certain employers in Ebeye to follow-up on contributions that are in arrears and discuss implementing guidelines on MISSA taxes.
For the first time, the MISSA team was also able to meet with Major Chris Mills, the Director (Host Nation Activities) of the U.S. Army at Kwajalein Atoll (USAKA), who was also joined by USAKA’s Legal Adviser and representatives of Kwajalein employers (KRS, Chugach and AAFES). The meeting was facilitated by Jelton Anjain, the RMI’s Liaison Officer in Kwajalein Atoll.
The meeting in Kwajalein was very timely as social security issues, more particularly about Marshallese workers currently working for the Army & Air Force Exchange Service (AAFES), were discussed during the Joint Committee Meeting (JCM) held in Majuro in December. The dialogue was attended by a large group of U.S. officials headed by U.S. Ambassador Clyde Bishop and USAKA Commander Col. Frederick Clarke.
The meeting was very fruitful as subsequent communication with USAKA resulted to a very positive response from Col. Clarke.
Currently, about 100 Marshallese workers are being employed by AAFES in Kwajalein. Although AAFES expressed its willingness to provide social security and health benefits to its Marshallese workers, it is covered by the US-RMI Status of Forces Agreement.
Under Article VI of the agreement, an agency of the U.S. Department of Defense is exempt from all taxes, customs duties, fees, charges and license requirements of the government of the Republic of the Marshall Islands. AAFES is an agency of the Department of Defense.
In addition, U.S. Government agencies and officials are immune from the jurisdiction of courts of the Republic of the Marshall Islands, pursuant to Section 174 of the Compact of Free Association, as amended. As a result, the Social Security Act is not applicable or enforceable to AAFES.