Audit Raises Concern About Longevity Of RMI Social Security

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Report says fund could be bankrupt in 10 years without action

WELLINGTON, New Zealand (Radio New Zealand International, Sept. 30, 2012) – An audit report issued to the Marshall Islands parliament says the nation’s social security programme will be bankrupt in 10 years without legislative action to revamp the retirement system.

A management letter included in the fiscal year 2011 audit said the retirement agency can pay only 23 percent of the total current and future retirement benefits estimated at 287 million US dollars.

The audit report, by Guam-based Deloitte and Touche LLP, identified no concerns for the ninth straight year, confirming the Social Security Administration as the most accountable government entity in the country.

But the report says while the retirement fund is demonstrating a high-degree of accountability, there are numerous warning signs about the health of the retirement system.

The audit noted adding to the stress is the fact the number of workers and taxable earnings continues to decrease.

The report said this has forced the retirement program to withdraw money from both its local and overseas investments to meet retirement payments, further undermining the health of the fund.

It says with without prompt action by legislators to make changes in the system an increasing cash deficit is expected.

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