The Retirement Fund would have lost millions if it wasn’t for a prudent move by the Fund’s Executive Director and advisors to move accounts away from the European market.
According to Iaulualo Talia Faafetai, who took over as head of the pension fund for government employees a few months ago, shortly after they transferred the investment accounts to the US market, there was a 90% drop in the European market.
He said had they not made the transfer, the Retirement Fund would have lost millions of dollars similar to the $45 million that the Fund lost in the 2008 crash.
The Retirement Fund Executive Director was questioned at a Senate hearing on the financial status of the fund in light of campaign ads by the Faoa and Sanitoa gubernatorial team which expressed concerns about the liability of the Fund in the event that ASG is not able to repay the $11 million of Retirement Fund money invested in the American Samoa Economic Development Authority bonds.
Iaulualo told the hearing that the Fund is in good condition, and the bond investment which has a 12 year term, woud net a return of $9 million.
Last Friday, the Retirement Fund was valued at $185 million.
Iaulualo told senators that each month they have to use $700,000 from Fund investments to make up the difference between what the Fund collects from employer and employee contributions which is $800,000 and the amount of payouts to retirees, which is $1.5 million.
Iaulualo said the number of medical retirees has increased.
Senator Uti Petelo pressed for an explanation on the increase and enquired who the Fund was using for medical evaluations of employees on medical retirement.
Iaulualo replied that the Fund has been using Dr. Iotamo Saleapaga.
Senator Uti then asked if there’s a follow up evaluation of the medical reitree to ascertain whether he/she is fit to return to work.
The reply from Iaulualo was, there is a periodic evaluation of such cases.
Uti followed up if anyone who has been evaluated has returned to work after being granted medical retirement.
Iaulualo said no, not a single person.
Senator Soliai Tuipine asked about off island meetings of the Board of Directors as the cost of their trips was of concern to members.
Iaulualo said there used to be 7 off island meetings which all the board memebrs have to attend , during which the Fund managers and investment experts provide training.
He said with the current board , the number of off-island meetings has been reduced to 4.
Senator Magalei, a former member of the Board vouched for the neccessity of the Board’s off-island meetings with Fund advisors and experts.
He pointed out that in the past there were 5 board members but now there are 7.
Explaining the per diem rate for board members, Iaulualo said the per diem is the same as that of ASG and the number of meeting days dictates the per diem amount.
In response to a question about some Board members hopping on the plane on a Friday and coming back on Monday, Iaulualo said he does not have any knowledge of this.
Previous stories by KHJ News state that Retirement Board members have been known to receive $9,000 for any trip business trip off island regardless of destination and number of days for their meetings.
This is to cover airfares, accommodations and incidental expenses.
That policy was stopped shortly after the new executive director started.
