Pago Pago, AMERICAN SAMOA — The House approved last Thursday an Administration bill, which increases member contribution and provides a profit allocation from the American Samoa TeleCommunications Authority (ASTCA) to the ASG Employees’ Retirement Fund (ASGERF).

The measure, which was introduced last Friday in the Senate, also places an $85,000 annual salary cap, used to calculate the average annual salary to determine retirement payments.

The bill’s preamble states that the actuarial soundness of ASGERF is required to ensure that ASG employees will receive their benefits earned through loyal and efficient service. The Fund actuary has recommended an increase in contributions to the Fund.

The ASGERF board of trustees has deemed that it is in the best interest of the Fund for members to increase their financial support of the Fund. “The increase in contribution will significantly improve the financial security of the Fund, payments from which play an important role” in the territory’s economy, it says.

Under current law, ASG employees’ contribution rate is 2.85% of the salary earned while the government is at 8%. The Administration’s bill proposes a 4.5% contribution rate beginning Jan. 1, 2020; 6% beginning Jan. 1, 2021 and 7.5% starting Jan. 1, 2022.

However, the House amended the bill to reflect only one increase — from 3% to 4% beginning Jan. 1, 2020.

According to the bill, $85,000 is a reasonable amount to cap average salary calculations to determine retirement payments, and this will help a greater number of retirees by ensuring more money is available for payments.

The Administration bill seeks to create a new section under current law Section 10 - Public Planning, Budget and Development. The proposed new section deals with ASTCA budget requirements and appropriations of profits.

The legislation states that due to the unique nature of ASTCA, its approved budget shall include:

•     Sufficient amount of funds for capital expenditures to ensure ASTCA remains competitive in the telecommunications market; and

•     Sufficient amount of funds for general working capital expenditures and emergencies.

ASTCA profits are defined in the bill as any revenue in excess of its expenses. The bill sets by law how ASTCA profits are earmarked and allocated:

•     50% placed in an earmarked account to pay for ASTCA’s 2018 bond debt pursuant to its repayment agreement with the American Samoa Economic Development Authority; upon full repayment of said agreement, these funds shall be used to pay any other debts ASTCA owes to ASG or any of its departments or agencies;

•     25% to ASGERF to fund its liabilities; and

•     25% to ASTCA for capital expenditures and emergency purchases.

The Administration had proposed a similar earmark and allocation of ASTCA profits through legislation dealing with revenues from the Hawaiki submarine cable — that measure is still pending in the Fono.

Samoa News should point out that the current CEO of ASTCA, Lewis Wolman has noted before the Senate Budget and Appropriations Committee during a hearing on the Administration bill dealing with Hawaiki revenues, that sharing with two other ASG entities, revenues earned from the Hawaiki capacity sale, adds an additional burden on ASTCA to operate. He also said that currently Hawaiki is earning zero dollars.

The current legislative session official ends on Wednesday and it’s unclear at this point if these two measures will be placed on the agenda during the Fono’s Special Session, which convenes Oct. 3-17th.