House reminded of the Retirement Fund law

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At the urging of House Speaker Savali Talavou Ale and Vice Speaker Fetu Fetui, the House Retirement Committee voted today to report the bill raising the ceiling on local investment by the Retirement Fund to the House floor for second reading tomorrow,

Committee Chairman Vailoata Amituanai said that reports which the committee requested from the Retirement Office and American Samoa Telecommunications Authortity had not been received.

The requested reports include ASTCA’s income statement, the authority ‘s net position for the last fiscal year, and correspondence from investment advisors supporting the Hawaiki Cable project.

The bill to increase the ceiling of local investments by the Fund from 17 to 35% would allow the Board of the Retirement Fund to approve an $18.2 million loan to ASTCA to repay the Hawaiki Cable.

Rep Veevalu Meauta Mageo circulated to Committee members a section of the Retirement Fund law which sets out requirements that the Fono must follow when reviewing legislation relating to the Retirement Fund.

Section 7.1405 provides that all proposed Legislation which concerns members in the Retirement Fund, benefits paid by the Fund, contributions to the Fund, investment of Fund assets or management of the Fund shall be referred to the Senate and House Retirement Fund Committees.

It further states that before the final vote is taken in either the Senate or House on any such legislation, the Retirement Fund Committee of that body must submit to the voting members a written report from both the actuary and the Board of Trustees regarding the proposed legislation.

The actuary’s report shall indicate the financial impact of the legislation on the future solvency of the Fund and future benefit payments.

The report of the Board of Trustees shall contain its recommendations concerning the legislation, whether the board supports or opposes it, any recommended changes, and the board’s detailed reasons.

The final provision in this section of the Retirement Fund law says:

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Meauta urged that they follow the law and obtain an actuary report showing how the Fund will be impacted by the proposed bill.

He said their work will be for naught if they don’t follow provisions of the law.

Represenative Toeaina Faufano Autele took the same position.

He said they should obtain written reports and not just take verbal statements.

Toeaina cautioned against killing the golden goose which is the Retirement Fund and pointed to ventures which the government financed in the past that have failed or still struggling  like the Rainmaker Hotel and the Development Bank.

But Vice Speaker Fetu Fetui said the Hawaiki Cable investment was the best investment by the Retirement Fund.

He said if ASTCA defaulted on loan payments to the Retirement Fund, there’s nothing to worry about because he’s heard ASTCA is worth $400 million.

He said the reports can come later but they need to act on the bill now because the Hawaiki cable is already here.

Speaker Savali Talavou Ale said that lawmakers needed to concern themselves only with the legislation at hand which seeks an increase in the ceiling of local investment by the Retirement Fund from 17 to 35 percent.

He said scrutinizing whether the investment is sound is the Board of Trustees’ responsibility.

Savali urged House members to give their trust to the people who are looking after the Fund.

He told the chamber they should make a decision on the bill tomorrow and reports can come later.

A motion to report the bill to the floor for second reading tomorrow was approved.