Government of the Federated States of Micronesia

EERP Transmitted to Congress for Introduction

PALIKIR, Pohnpei (FSM Information Service): February 11, 1997 - Acting President Jacob Nena transmitted January 30, to Speaker Jack Fritz for introduction, proposed legislation that comprises a major component of our nation's economic reform efforts. The Bill is the National Government Employees' Early Retirement Program ("program").

As stated in the Bill, the purpose of the program is to lower the long-term cost of National Government operations. It establishes an early retirement program with the goal of shifting the economy towards private sector development. In sum, program participants will be determined based upon a list prepared by each branch and agency of the National Government that includes a list of positions that are ineligible for inclusion in the program. Positions exempt from the Public Service System Act and those that are deemed essential for the provision of public service are automatically ineligible for inclusion in the program.

Compensation for program participants turns on whether a participant is under or over 55 years old and provides for several payment methods. In addition, the proposed bill prohibits program participants from being eligible for reemployment in any capacity by the National Government or any agency thereof, but exempts from this prohibition those that return in elected or advice and consent positions. The bill also imposes a freeze on salary increases and institutes compensatory time in lieu of overtime payments.

Finally, the proposed bill establishes a Retirement Repayment Fund, separate from the General Fund. The Asian Development loan proceeds are to be deposited into the Retirement Repayment Fund, as are funds appropriated for each position abolished under the program. Compensation to program participants and repayment of the Asian Development Bank loan will be paid from this Retirement Repayment Fund.

Unlike most other Executive Branch bills, this proposed legislation has already received considerable Congressional input through its legal counsel. Most of the suggestions, both technical and substantive, made by Congress' counsel have been incorporated into the present bill. "We undertook the unprecedented route in order to assist in a timely consideration of this important piece of reforming our economy, and urge Congress to consider favorably this bill," said Nena.

For further information on this release, please contact:

FSM Office of the President
Public Information: Press, Radio, Video
P.O Box 34
Palikir Station, Pohnpei, FM 96941
Tel.: (691) 320-2548/2092
Fax.: (691) 320-4356