Pago Pago, AMERICAN SAMOA — ASG Employees Retirement Fund officials voiced their support for a Senate bill, which seeks to increase the contribution by the government and employees to the government’s pension plan, saying that it’s long overdue.

“Payout is $23 million in just benefits alone [annually],” Retirement Office executive director I’aulualo Fa’afetai Talia told the Senate Retirement Committee during a hearing on the bill yesterday. “We’re only receiving $10 million from the government on contributions.”

I’aulualo, who was accompanied to the hearing by Vaanatiu Tofala Iafeta, chairman of the ASGERF board of trustees, said the amount — the $10 million in contributions annually — changes from year to year, as “people retire” and employees “cash out their retirement.”

The annual average “payout from the Retirement Fund is between $23 million and $25 million,” said I’aulualo, whose testimony re-affirmed the bill’s preamble which states that records from ASGERF to the Fono show that the Fund paid out $25.3 million in benefits and refunds but it only brought in $10.8 million from contributions — $7.8 million from ASG and  $3.02 million from members — creating a shortfall of $14.5 million between contributions and payouts that was paid from the Fund’s investment earnings.

The current 11% contribution to the Fund — as dictated by law — breaks down to 8% from the employer and 3% by the employee.

The bill, sponsored by Sen. Magalei Logovi’i, seeks a “3%” increase to be added to the government’s contribution rate while the members’ contribution hikes from 3% to “5%” — creating a new contribution rate of 16%.

An actuary report for fiscal year 2019, released in May 2020, by SageView Consulting Group — that was shared earlier this week with senators —  recommends a total contribution rate of 19.6%.

Asked by Magalei for his view on the proposed law, I’aulualo said he and the Retirement Office support the measure and thanked the Senate for this action, which he says is very important and is long overdue.

I’aulualo also points out that previous actuary reports have recommended an increase in the contribution rate to the Fund.

To come close to the 19.6% recommended in the latest actuary report, Sen. Utu Sila Poasa — who supports the measure —  suggested amending the bill for another 3% or 3.6% increase — to be added on a few years down the line to safe guard the Fund from going under.

Sen. Malaepule Saite Moliga said he believes the bill is appropriate as is for the time being, and he points out that the proposed increase in the measure won’t be easy for employees to accept. However, he said this issue benefits employees.

The 30-minute hearing ended with Va’anatiu commending the Senate for this bill, which will secure the future of the fund and such an increase has been recommended in the past.

The measure was presented yesterday during the Senate session and it was approved during second reading, and expected to go through third and final reading today.

Also presented for second reading and approved by senators, is the Administration’s fiscal year 2021 budget bill totaling $465.95 million. The budget goes through its third reading today.