The Executive Director of the American Samoa Government Employees Retirement Fund Iaulualo Faafetai Talia assured members of the House Retirement Committee that monthly checks for retirees will be covered.
Iaulualo and Chairman of the Retirement Fund Board Vaanatiu Iafeta Tofala were called before the committee yesterday to explain how the slump in the stock market due to the coronavirus epidemic is affectin gthe pension fund for ASG employees.
According to Iaulualo two weeks ago the fund was valued at $210 million but as of yesterday it had dropped to $195 million.
He explained that the panic created by coronavirus fears was affecting not just the US stock market but Europe, Asia and around the world.
Responding to a question from Rep Vesi Fautanu, Iaulualo assured that the monthly retirement checks will be covered regardless of losses from the stock market.
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He said the Fund’s investment portfolio was doing well and this should help cushion the effects of the stock market drop.
Monthly contributions from ASG and members of the pension fund amount to $800,000- $900.000. And benefit payouts amount to $2 million. The difference comes from investment earnings.
Iaulualo said there are more people retiring at high salaries and retirees are living longer.
Rep Larry Sanitoa asked about the actuary report a few years ago which said that if contributions are not increased, the fund would be bankrupt by 2039.
He said the law provides that the fund is supposed to use the actuarially determined contribution rate, so no legislation is needed to increase the employer rate…it’s just the employee rate which needs legislation.
According to Sanitoa an increase in the government’s contribution rate can be included in the yearly budget.
Iaulualo said this was also his understanding of the statute,
But unfortunately they’ve proposed an increase to the Governor’s Office but nothing has materialized.
Vice Speaker Fetu Fetui, Reps. Faimealelei Anthony Allen and Gafatasi Afalava said they are confident that the Retirement Fund Board and Director, along with the fund advisors will successfully steer the pension fund through the current volatile and stormy conditions of the stock market and rebuild the fund just like it did in the 2008/2009 stock market crash.
