After a two and a half hour hearing on the bill to raise the cap of local investment by the Retirement Fund from 17 to 35 percent this afternoon, the House Retirement Committee voted to first obtain reports which the ASG witnesses were told to provide before further action on the bill.
While Committee Chairman Vailoata Amituanai gave his preference to hold off on reporting the bill to the floor till next week, House Speaker Savali Talavou Ale and Vice Speaker Fetu Fetui suggested that they review the bill as soon as the reports are handed in, which maybe tomorrow or on Friday,
The witnesses who testified on the bill were Attorney General Talauega Eleasalo Ale, Acting CEO of ASTCA Falavaoto Sualevai, Director of the Retirement Fund Iaulualo Talia Faafetai and chairman of the Retirement Board of Trustees, Vaanatiu Iafeta Tofala.
The bill would authority the Retirement Fund to loan $18.2 million to ASTCA with the proceeeds going to repay the Hawaiki Cable.
The witnesses faced tough questioning particularly from Representatives Vailiuama Steve Leasiolagi, Sala Dr. Samuelu Mataese, Veevalu Meauta Mageo and Vesi Fautanu.
The one faipule who vowed that he will vote in support of the bill was Vice Speaker Fetu Fetui who also pledged his Manu’a colleague Vesi Fautanu’s vote for the legislation.
The majority of questions were directed at the Acting Ceo of ASTCA and centered on the total amount that the authority has received from the Retirement Fund, how the authority can repay the new $18.2 million loan, and also meet existing payments to ASH Cable, 03b networks and the Rural Utilities Service for BLAST, and if ASTCA is able to attract new customers to make use of the 200 gigabytes capacity of the Hawaiki Cable.
ASTCA is now paying a $10 million balance of a loan from the Retirement Fund. This is separate from a $17 million asset purchase of the American Samoa branch of the Hawaiki Cable by the Fund through financing to ASTCA.
Ms Sualavei said terms of repayment of the $17 million have not been finalized and therefore is not included in the loan payment schedule that was provided to the Fono.
In response to a series of questions from Rep. Vailiuama, the Acting ASCTA CEO explained that they need to pay $3.2 million to Hawaiki this month and a balloon payment of $15 million next month, hence the $18.2 million which ASTCA is seeking from the Retirement Fund.
Rep Veevalu recollected that during the Retirement Fund meeting in Hawaii a year ago the Retirement Fund’s unfunded liability was raised as a concern, given that the Fund was paying out $25 million and only getting $18 million in employee /employer contributions.
At that rate the actuarial report for the Retirement Fund estimates that by 2035 the Fund will be bankrupt.
He said this has still not been addressed.
And he questioned the wisdom investing such a large sum of money in an entity with a shaky financial status
Iaulualo and Vaanatiu said that the board has the support of the Retirement Fund advisors concerning that investment in the Hawaiki Cable was sound.
The Board chairman elaborated that the trustees take very seriously their responsibilities of protecting the Fund for members .
Vaanatiu said unlike investment in the overseas money markets , which they cannot control, the board is helping Fund a major development for the territory and would be able to control how the entity its investing in fares.
Representative Fialupe Fiaui Lutu and Vui Florence Saulo , reminded that the Retirement Fund was set up for government employees to have something to fall back on in their advanced years.
They recommended that they be asked to give their opinions on this investment after all its their money,
When asked if there was any other way to get the payments for the Hawaiki Cable, Attorney General Talauega said there were several options, one of which is to loan from an off island company, which means that money will be going out of the territory.
But he said the plan proposed by the administration was one which wood keep the money in the territory and when the Hawaiki Cable starts reaping dividends , the contributions by the government to the Retirement Fund would be lowered. He told lawmakers they were chosen by their districts because of their leadership and in representing their interests.
Talauega said , “I pray you will do what is right for the good of our people and government.”
We’ll have more on today’s committee hearing in our news tomorrow.