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Home >> Benefit Retirements

Entitlement to Retirement Benefits:  There are three types of Retirement Benefits:

(1) Early Retirement, 
(2) Normal Retirement, and
(3) Deferred Retirement.

To be entitled to Early Retirement Benefits, the Claimant must be:

  • Service insured;
  • Have attained the age of 55; and
  • Have filed an application.

To be entitled to Normal Retirement Benefits, the Claimant must be:

  • Fully insured;
  • Have attained the age of 60;
  • Have filed an application; and
  • Have not applied for and received Early Retirement Benefits.

To be entitled to Deferred Retirement Benefits, the Claimant must be:

  • Fully insured;Have attained the age of 60 and one month;
  • Have filed an application; and
  • Have not applied for and received Early Retirement Benefits or Normal Retirement Benefits.

Service insured means a worker or a self-employed worker has earned at least eighty (80) quarters of coverage.

Fully insured means a worker or self—employed worker has earned at least one quarter of coverage for each year beginning with the later of June 30, 1968, or the year in which the worker or self-employed worker attains the age of twenty-one (21) years and ending with the year before the year of death, attaining retirement age, or the year of becoming disabled, whichever first occurs; provided, however, that a worker or self-employed worker who dies, attains retirement age, or becomes disabled prior to October 1, 1983, must have no less than eight (8) quarters of coverage and a worker or self-employed worker who dies, attains retirement age, or becomes disabled after September 30, 1983, must have no less than twelve (12) quarters of coverage; provided, further, that the maximum number of quarters of coverage required shall be no more than thirty eight (38) quarters.

Commencement of Retirement Benefits:

  • A Claimant for Early Retirement Benefits becomes entitled to such benefits beginning with the month that the conditions of eligibility as set forth in Paragraph 1. a. of this Article were satisfied.
  • A Claimant for Normal Retirement Benefits becomes entitled to such benefits beginning with the month that the conditions of eligibility as set forth in Paragraph 1. b. of this Article were satisfied.
  • A Claimant for Deferred Retirement Benefits becomes entitled to such benefits beginning with the month that the conditions of eligibility as set forth in Paragraph 1. c. of this Article were satisfied.

Amount of Retirement Benefits: 

  • Retirement Benefits are computed on the Basic Benefit. The Basic Benefit is one-twelfth (1/12) of the sum of the pension element and the social element, where the pension element is two percent (2%) of indexed covered earnings and the social element is fourteen and one-half percent (14.5%) of the first $11,000 of cumulative covered earnings plus seven-tenths percent (0.7%) of cumulative covered earnings in excess of $11,000 but not in excess of $44,000.
  • The monthly amount of the Early Retirement Benefit is the Basic Benefit reduced by one-half percent (0.5%) of each complete month that the early retirement precedes the date that the Claimant will attain the age of 60 years, but not less than $128.99;
  • The monthly amount of the Normal Retirement Benefit is the Basic Benefit, but not less than $128.99; and
  • The monthly amount of the Deferred Retirement Benefit is the Basic Benefit increased by one-half percent (0.5%) of each complete month that the deferred retirement follows the date the Claimant will attain the age of 60 years, but not less than $128.99.

Reduction of Retirement Benefits Based upon Subsequent Earnings:

With respect to claimants under the age of 62, the Retirement Benefit amount will be reduced by $1.00 for every $3.00 earned in a quarter in excess of $1,500. The adjustment in benefits will be applied as soon as practicable following the quarter in which the earnings were made and reported. No adjustment is made for claimants who have attained the age of 62 years.

Example: If a Claimant earns a total of $2,000 for a quarter, while receiving a Retirement Benefit of $300.00 per month, the benefit can be reduced during the three-month period, beginning with the first month after the quarter in which the earnings were made and reported. The computation is as follows:

Subtract $1,500 from $2,000 leaving $500. For every $3.00 in excess of $1,500, the quarterly benefit is reduced by $1.00. The amount of reduction in the quarterly benefit is calculated by dividing $500 by 3, which equals $166.66. Subtract the $166.66 reduction from the quarterly benefit ($300 X 3 months = $900) and then divide the result, ($900 - $166.66 = 733.84), by 3 yielding the adjusted monthly benefit of $244.61. This will be paid for a three-month period, after which time the regular amount will be resumed, unless additional earnings in excess of $1,500 are reported for subsequent quarters.

Suspension of Retirement Benefits:

If a Claimant is not a citizen or national of the Marshall Islands, his Retirement Benefits will be suspended for any month after the sixth consecutive month during which the claimant is outside the Marshall Islands.

Note: Claimants whose application for retirement benefit was filed prior to October 1, 1990 (regardless of citizenship) are exempted from this provision and shall continuously receive the benefits even if they are already permanently residing off-island.

Paragraph 6.a. of this article does not apply to any Claimant who is a citizen or national of the Federated States of Micronesia, the Republic of Palau, or the United States of America, if the Federated States of Micronesia, the Republic of Palau, and the United States of America, respectively, extend periodic benefits on account of retirement to citizens and nationals of the Marshall Islands who are not citizens of the subject country, who qualify for such benefits, and who are permitted to receive such benefits outside the country without regard to the duration of the absence.

Evidence of Continued Entitlement:

The Administrator may, at any time, require a claimant to provide evidence to the satisfaction of the Administration of his entitlement to the Retirement Benefit.

If the evidence required under Paragraph 7.a. of this Article is not produced within the time fixed by the Administrator, he may suspend payment of the benefit until such time the required evidence is produced.

Termination of Retirement Benefits:

Retirement Benefits terminate the month before the month in which the Claimant dies.

Re-computation of Retirement Benefits Based upon Subsequent Earnings:

If a Claimant of Retirement Benefits earns covered wages after becoming eligible and receiving Retirement Benefits, his benefits will:

  • Be recomputed to reflect the increased earnings after each calendar year in which the earnings were made;and
  • The adjusted benefit will be payable beginning with the first month following the year in which the earnings were made.

Example: Additional earnings during calendar year 1991 will be recomputed on the basis of the new cumulative earnings, with the new benefit rate effective for January 1992.

Estimated Benefits:
Any Wage Earner is entitled to know what his Retirement Benefits may be, even though he does not plan to retire at that time. In such cases, it is desirable to have the wage earner complete a retirement application. Once this is done, the Administration shall compute the Retirement Benefit; provide a copy of the computation to the Wage Earner; attach a copy of the computation to the pro-forma application; and file the pro-forma application and computation for future reference.

If the Wage Earner would also like to know what his benefits may be if he continues to work, the Administration, based upon prior earnings, shall determine the Wage Earner’s prospective covered earnings and indexed covered earnings for the years he plans to continue working. Add these amounts to the cumulative covered earnings and indexed covered earnings to date and calculate the future benefit on the basis of the present benefit formula.

Quarters of Coverage:
A quarter of coverage is any calendar quarter beginning January 1 and ending March 31; beginning April 1 and ending June 30; beginning July 1 and ending September 30; and beginning October 1 and ending December 31, in which an individual has been paid at least $250.00 in wages which were subject to Social Security taxes.

Acquiring Quarters of Coverage:
A quarter of coverage is acquired as of the first day in a quarter in which wages paid total at least $250, regardless of the date in the quarter when the wages were paid.

If the Wage Earner had more than one employer, it is of no concern that the wages from each employer are less than $250. If total wages from all employers are $250 or more, the Wage Earner earns one quarter of coverage.

Maximum Earnings Reported for Each Quarter
July 1, 1968 through June 30, 1973…………..    $  750
July 1, 1973 through June 30, 1976…………..    $  900
July 1, 1976 through February 18, 1990……... $1,200
February 19, 1990 and after…………………..........$5,000

Method of Computing Benefits from Cumulative Earnings for Various Periods:

Period:  July 1, 1968 through June 30, 1973
First      $5,000              X          6%, plus
Next     $15,000            X          1%, plus
Over      $20,000           X          0.5%
Divide the sum by 12 to yield the monthly retirement benefit.
Minimum monthly benefit is $10.00.

Period:  July 1, 1973 through June 30, 1975

First      $5,000              X          7.5%, plus
Next     $15,000            X          1.25%, plus
Over      $20,000           X          0.625%

Divide the sum by 12 to yield the monthly retirement benefit.
Minimum monthly benefit is $20.00.

Period:  July 1, 1975 through June 30, 1976

First      $5,000              X          7.5%, plus
Next     $15,000            X          1.5%, plus
Over      $20,000           X          0.75%

Divide the sum by 12 to yield the monthly retirement benefit.
Minimum monthly benefit is $24.00.

Period:  July 1, 1976 through June 30, 1986

First      $10,000             X          9.9%, plus
Next     $30,000             X          1.65%, plus
Over      $40,000            X          0.82%

Divide the sum by 12 to yield the monthly retirement benefit.
Minimum monthly benefit is $26.40.

Period:  July 1, 1986 through December 31, 1988

First      $10,000             X          16.2%, plus
Next     $30,000             X          2.7%, plus
Next     $30,000             X          1.35%, plus
Over      $70,000            X          0.675%

Divide the sum by 12 to yield the monthly retirement benefit.
Minimum monthly benefit is $43.20.

Period:  January 1, 1988 through September 30, 1990

First      $11,000 X          16.5%, plus
Next     $33,000             X          2.7%, plus
Over      $44,000            X          1.35%

Divide the sum by 12 to yield the monthly retirement benefit.
Minimum monthly benefit:           $47.50.

Period:  October 1, 1990 and after

First      $11,000             X          14.5%, plus
Next     $33,000             X          0.7%, plus
Over      $44,000            X          2.0%

Divide the sum by 12 to yield the monthly retirement benefit.

Minimum monthly benefit:           
$47.50 from October 1, 1990 through September 30, 1991
$100.00 from October 1, 1991 through September 30, 1992
$116.10 from October 1, 1992 through September 30, 1995
$128.99 from October 1, 1995 through present.

Determining the Required Number of Quarters of Coverage for Fully Insured State:

Attainment of Age 21 before July 1, 1968
Refer to the following table to find the required number of quarters (shaded region) for the appropriate year (FY 1969 – 2007; July 1 – June 30)

1969

8

1982 13 1995 26
1970 8 1983 14 1996 27
1971 8 1984 15 1997 28
1972 8 1985 16 1998 29
1973 8 1986 17 1999 30
1974 8 1987 18 2000 31
1975 8 1988 19 2001 32
1976 8 1989 20 2002 33
1977 8 1990 21 2003 34
1978 9 1991 22 2004 35
1979 10 1992 23 2005 36
1980 11 1993 24 2006 37
1981 12 1994 25 2007 38

Attainment of Age 21 after June 30, 1968
Number of quarters of coverage required is counted for each year since age 21 is attained, however; it should not be less than 8 quarters of coverage.