Pago Pago, AMERICAN SAMOA — In voting “no” on a Senate bill, which seeks to increase contributions to the ASG Employees Retirement Fund (ASGERF), Sen. Togiola T.A. Tulafono argued that the proposed rate increase for employees would reduce the take home pay for workers, and especially affect those in the lower-level pay scale while there’s no solid information on a salary hike for government employees who would be affected.

Togiola’s arguments were made after the proposed law seeking a “3%” increase to be added to the government’s contribution rate while the members’ contribution hikes from 3% to “5%” — went through third reading and senators were prepared to vote on the measure at last Friday’s Senate session.

Togiola recalled that when the Tauese Administration took the helm of government in 1997, the ASGERF — through the board of trustees — had made similar recommendations to increase the employee contribution — but it was rejected at the time. (Samoa News notes that Togiola was lieutenant governor during the Tauese Administration.)

He contends that the latest ASGERF actuary report released in May 2020 that seeks a 19.6% total contribution increase — gives the same explanation behind the increase as it did during the Tauese Administration more than 20-years ago.

And he questioned why the Fund has not collapsed after all these years, since there was no increase in contribution enacted all this time.

Togiola believes that same recommendation has been made in the actuary reports during the Lolo Administration.

The former governor said he opposes the hike in contributions from employees for two reasons. The first one is that there is no record that shows a pay hike for employees in the last 10 years but their contribution is being proposed to increase, and will be deducted from an employees pay — reducing the take home pay for the worker.

He further argues that the proposed increase for employee contribution is not a small amount for a worker, whose salary is only $15,000 or anyone who’s annual pay is below $25,000. “It’s a large sum” of money, he said.

The second reason for opposing the measure is the lack of information on the Fund’s various investments. He said the latest report by actuary shows a loss on investments and nothing is being done about it nor is there an explanation on why there is a loss.

He points out that income earned from investment is the area in which the Fund was to grow and to cover any shortfall in contributions by both employer and employee.

Togiola said it’s very unfair that employees — especially those with lower annual pay — will have to shoulder the burden of the proposed hike. While acknowledging that the contribution goes towards the future of retirees, he said not all people retire.

In his final argument, Togiola points out that the Lemanu Administration is new in office — since Jan. 3rd — and should be given some breathing room before being approached for their view and opinion and discussion on this very important issue.

Togiola said he would have been very happy if the government had announced a pay hike for workers and that any pay increase is the same percent as that proposed in the Senate ASGERF bill. He made know that his vote is “no” to the bill and asked for a delay on this measure.

Senate Retirement Committee chairman, Sen. Soliai Tuipine Fuimaono responded that the bill has already gone through third reading — and in accordance with Senate rules — the only action left is to vote. Senate President Pro Tempore Magalei Logovi’i, who presided over Friday’s session agreed.

With Togiola the lone “no” vote, the Senate approved the bill, in a 13-1 vote and it now goes to the House for their review and consideration.

Retirement Office executive director I’aulualo Fa’afetai Talia told senators last Thursday that the Fund pays out between $23 million to $25 million a year while contributions from employer and employees is only $10 million. And it is income earned from investments that covers the shortfall of payouts.

FY 2021 BUDGET BILL

Also at last Friday’s session, the Senate in an unanimous vote of 14-0 approved the House version of the Lemanu Administration’s $465.95 million budget for fiscal year 2021 — from Oct. 1, 2020 to Sept. 30, 2021.

The legislation goes back to the House today, where it will be recorded in the Fono journal before sending it to the governor for his review and approval. With no changes made to the bill, the governor is expected to sign it into law.