Government of the Federated States of Micronesia

President Nena Submits Government Restructuring Plan

PALIKIR, Pohnpei (FSM Information Service): July 31, 1997 - FSM President Jacob Nena, on May 15, 1997, submitted to Congress Speaker Jack Fritz, a draft legislation for Congress' consideration and action.

Accompanying the draft legislation was the report by the President's task Force on Government Restructuring upon which the draft legislation was based.

The restructuring proposal was in direct response to the 1995 FSM Economic Summit and to the mandate of the Ninth Congress thorough passage of Congressional Bill 9-295, which became Public Law No 9-155, on April 27, 1997.

Public Law No. 9-155, establishes a National Government Employee's Early Retirement Program (ERP), which can become effective 60 days after the end of the First Regular Session of the 10th Congress which adjourned June 10, 1997.

The President stated that the National Government has committed $3 million for the National Government's Early Retirement Program from the total loan of $18 million. FSM is the proposed borrower from the Asian Development (Bank) for Public Sector Reform. This financial support will enable the FSM to implement the 20 percent reduction of the National Government workforce over the next couple years.

The plan is designed to enable permanent employees under the Public Service System to join the early retirement program and by joining the program will receive a lump sum payment equivalent to six pay periods if an employee is 57 or older, or lump sum salary payment equivalent to a 46 or 52 weeks, if younger than 57 years of age. Additionally, an employee who has opted to participate in the ERP shall lose his future eligibility for employment with the National Government.

President Nena recommended to Congress that ERP be implemented by October 1, 1997, by reduction of 50 positions that would realize, as a result, a saving of $800,000 to the national Government. Further planned reductions in the executive, legislative, judicial branches and independent agencies of the National Government in the succeeding years will result in a targeted reduction of 100 positions and a cost reduction or cost savings of $1.2 million.

Nena recommended that the 1998 Budget which was enacted into Public law No. 10-24, is amended to reflect the restructuring of the National Government as submitted by his office.

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