Pago Pago, AMERICAN SAMOA — The American Samoa Government is currently proposing significant changes to its contribution rate to the Retirement Fund, aiming to adjust it to 8% for Fiscal Years 2026 and 2027. 

In his letter addressed to the Senate President, Governor Pulaali’i Nikolao Pula highlighted the current contribution rate of 14% — set by a 2021 law — that has come under scrutiny for its sustainability.

The proposed legislation seeks to amend the existing law by reducing the government’s contribution rate to 8%, beginning on October 1, 2025, and extending through September 30, 2027. After this period, the contribution rate will increase to 10%, running from October 2027 until September 30, 2028. After the 2028 fiscal year, the new rates will be governed by a formula specified in the proposed amendment, which aims to introduce a more flexible and potentially sustainable approach for future funding.

Governor Pulaali’i expressed his deep concerns regarding the current contribution rate of 14%, labeling it “clearly unsustainable.” He took time to reflect on the circumstances surrounding the 2021 decision to raise the contribution rate, pointing out that it was made during a critical period of the COVID-19 pandemic. During that time, financial markets were extremely volatile, and there was an urgent need to fund various responses to the health crisis, which in turn were funded in part by federal assistance. However, as the Governor noted, “those economic boons are now gone,” indicating a shift in the economic landscape.

In his communication, the Governor underscored the importance of responsibility and accountability in government budgeting. He stated, “When I swore my oath to ensure that the laws are well and faithfully executed, this included past laws as well as previous actions.”

He reflected on the difficult budget cuts implemented in the previous year, which, although painful, were necessary to maintain fiscal integrity. He asserted that failing to make these adjustments would neglect his constitutional duty to the people of American Samoa.

In addition to reducing the contribution rate, Governor Pulaali’i is working to establish a collaborative agreement with the American Samoa Government Employees Retirement Fund (ASGERF) Board. This agreement would outline a payment plan for the government to address its outstanding financial obligations over time, reinforcing a commitment to fiscal responsibility.

To further his goals, the Governor has reached out to the Fono leaders, requesting their support in this essential first step toward reforming the Retirement Fund. He envisions a stronger, more accountable, and transparent Fund that is better equipped to serve its members and ensure the long-term sustainability of retirement benefits for government employees in American Samoa.