The American Samoa Government Employee Retirement Fund (ASGERF) Executive Director, Talia I’aulualo Fa’afetai, says their office should have been consulted prior to the introduction of the bill regarding retirement benefits.

Responding to Samoa News, Talia said he was not aware of the bill that’s being introduced in the House and hopes that the lawmakers would consult with the ASGERF or its board before this bill is considered to be passed into law.

Last week, Chairman of the House Retirement Committee, Vailoata Eteuati Amituana’i sponsored legislation that would increase the minimum monthly retirement payment to $100 and increase certain death benefits for beneficiaries of Retirement Fund members who die prior to actual retirement to $3,000.

“I wish whoever introduced the bill would make sure that they are looking at a factual basis and the accurate information before taking any action,” Talia said.

He noted the lawmakers should have requested an actuary report because this bill comes at a bad time. He said it creates a cost for the fund and especially now with the big drop in the market that’s totally beyond anyone’s control. He said as a result the ASGERF has had to move out from the international and emerging markets. Talia was referring to the drop in value of the ASGERF portfolio over the last few months after which Investment Consultant Jim Garrel made recommendations about getting out of such markets. This was revealed in the minutes of last month’s board meetings.

Talia told Samoa News yesterday over the phone that the biggest question that should have been asked by the lawmakers is: “Can it be supported by the fund?” Talia believes that there should have been an open dialogue between the ASGERF and the lawmakers prior to any action taken on this proposed bill. Some board members believe the Fono should not entertain this bill given the situation the fund is in currently.

The bill is co-sponsor by Vice Speaker, Fetu Fetui Jr and lawmakers, Larry Sanitoa, Vaetasi Saena Moliga, Mauagaoali’i Leapai Sipa Anoa’i, Timusa Tini Lam Yuen, Vaiaitu Mulinu’u Maluia, Manumaua Wayne Wilson and Vesi Talalelei Fautanu Jr. (See initial story in yesterday’s edition).

Sanitoa is quoted as saying, “…our initial research of the bill shows that there will be no significant impact to the fund as there will be a small percentage of the retirees affected.” However, he also noted that the fact remains, that before the Fono passes any legislation affecting the Retirement Fund “reports from Actuary and Board of Trustees are necessary to move any bill forward.”

BACKGROUND

Consultant Garell stated that if the board wants to move out of the international and emerging markets, he recommends moving to the S&P 500. At a meeting on January 21 the board voted unanimously to do just that, and transfered the proceeds to the State Street S&P 500 Index Fund.

(According to the S &P 500 website, they are widely regarded as the best single gauge of large-cap U.S. equities. There is over USD 7.8 trillion benchmarked to the index, with index assets comprising approximately USD 2.2 trillion of this total. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.)