At the February 15 and 16 annual meeting of the American Samoa Government Employees Retirement Fund, Board of Trustees in Las Vegas, the auditors and actuaries presented a grim picture of the Fund.
In Fiscal Year 2022, the Fund lost a staggering $37.4 million. While many pointed to the profit of $14.2 million the year before, the reality is the Fund has lost money three out of the last five-years and racked up accumulated losses of $36.8 million over that period.
In 2022, benefit payments of $24.2 million were only partially covered by contributions of $15.8 million. Typically, ASGERF depends on investment income to make up the shortfall. However, the Fund had an investment LOSS of $24.9 million. To make up the shortfall, ASGERF had to cash-in assets. Between 2021 and 2022, assets dropped from $196.0 million to $192.3 million.
Administrative expenses climbed 10.1%. These expenses include the annual meetings held outside of American Samoa. In attendance are the ASGERF board of directors, staff, and advisors.
House Representatives who attended the ASGERF meeting this month are Fetui Fetu, Tiaoalii Sai, Avagafono Maiava, Lua’itaua Gene Pan, Sauasetoa Ho Ching, Malaeoletalu Melesio Gurr, Alailepule Ben Vaivao, Shaun Vaa, Manumaua Wayne Wilson and Ape Mark Asifoa.
From the Senate side were Senators Soliai Tuipine, Tuiagamoa Tavai, Fano Mitch Shimasaki, Satele Lili’o and Senate President Tuaolo Manaia Fruean who chairs the ASGERF Board of Trustees.
According to a House member, their travel expenses were covered by the Fono and they received per diem of $2,700 for the two day meeting.
Because ASGERF is underfunded by $169.8 million, the actuaries are recommending the combined ASG and employee contribution rate be 19.36%. Currently, the combined contribution rate is 14% with ASG contributing 10% and employees contributing 4% of their salaries.
Members will see their net pay further decrease as of October 1, this year and October 1, 2024, as the rate increases to 5% and 6% respectively. ASG’s contribution rate will increase to 12%, and 14% simultaneously.
In 2022, ASG contributed $11.3 million while employees paid $4.5 million. If payroll does not change, ASG will be contributing $19.8 million in 2025. Because funding for the ASG’s pension plan comes from local funds, the increase in the contribution rate will result in $8.5 million less spending for government program and services.
The actuaries reported a 392 person decrease in the active member count from 5,155 in 2021 to 4,763 in 2022. The counts differ from the audit that reports an increase in the active member count from 4,082 to 5,155. During the same period, the actuaries reported the average government salary increased 16.6% from $24,131 to $28,135. Covered payroll increased by $20.7 million from $120.4 million to $141.1 million.
The number of retirees stood unchanged between 2021 and 2022 at 1,901, according to the actuaries. The audit reported a decrease from 1,939 to 1,901. Unlike the government employees, retirees were not so lucky. The actuaries reported the average benefit increased a paltry 0.97% from $12,673 to $12,796. By comparison, the local inflation rate for 2022 equaled 13%.
