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.