The Executive Director of the ASG Employee Retirement Fund Iaulualo Talia Faafetai told senators that the Fund is in good condition and is not impacted by the American Samoa Economic Development Authority bonds.
Senator Laolagi Vaeao who requested the hearing with Iaulualo said he wanted to hear from the executive director about the condition of the Fund in light of statements with have been published and broadcast saying that the Retirement Fund is negatively impacted by the bond purchase.
There was no mention of the source of the statements throughout the hearing this morning though its understood the statements are contained in campaign ads by the Faoa Sanitoa camp.
Responding to a question about whether there’s any impact of the Fund because of the bonds, Iaulualo says there’s no impact.
He said ASG ‘s bond repayment to the Retirement Fund for the $11 million that went to the bond purchase is about $900,000 a year, with two payments in March and September of $449,000 each.
He said the term for repayment is 12 years and the Retirement Fund would generate a return of $9 million.
Iaulualo said as of last Friday the value of the fund was $185 million.
The main concern with the fund is that the employer employee contributions amount to $800, 000 per month but the amount of money that’s paid out to retirees is $1.5 million.
Iaulualo explained that the increase in the retirement payouts each month is due to the fact that many more retirees are living longer, and there’s a noticeable increase in the number of people who take medical retirement.
He explained that the employer contribution needs to be increased in order to make up for the difference in contributions and payments.
At present they’re borrowing $700,000 each month from retirement investment accounts to cover the difference.
Iaulualo says a request to increase the Retirement Fund contributions is now with the governor.
