By Fuiavailili Keniseli Lafaele, ASGERF Member
In Part One of this series, I discussed national research showing that weakening pension systems increases income inequality and slows economic growth, while strong retirement systems support economic stability. That same research makes another point just as clear: pensions do not stand alone. Their long-term sustainability depends on the broader economic environment within which they operate.
Two factors matter in particular—investment in public education and the structure of public revenues.
The study finds that states that consistently invested in public education experienced stronger, more durable economic growth. Education is not simply a social program; it is an economic infrastructure. A skilled workforce is more productive, earns higher wages, and contributes more reliably to public revenues and retirement systems.
When education investment is delayed or inconsistent, workforce shortages persist, productivity lags, and wages stagnate. These outcomes weaken consumer spending, constrain the contribution base, and place long-term pressure on public retirement systems.
This lesson is highly relevant for American Samoa. Workforce development, technical training, and post-secondary education are central to the territory’s long-term economic resilience. Investments made today help stabilize retirement systems tomorrow.
The study also highlights the importance of the revenue structure. States with balanced and progressive revenue systems were better able to sustain public services, reduce inequality, and maintain economic growth. Systems that rely on narrow or uneven revenue bases are more vulnerable to volatility and recurring shortfalls.
Progressive revenue systems are not about politics or punishment; they are about resilience. When revenues grow alongside the economy and are broadly shared, governments are better positioned to fund education, infrastructure, and retirement obligations over time.
For public retirement systems, For public retirement systems, this connection matters deeply. Pensions depend not only on contributions and investment returns, but on the strength and stability of the economy that surrounds them.
The central lesson is straightforward: strong pensions are part of an integrated economic system. Retirement security, workforce development, and fiscal sustainability rise or fall together.
Long-term solutions require long-term thinking.
