Governor proposes 2% COLA increase for ASG retirees
Gov. Lolo Matalasi Moliga has submitted to the Fono for review and approval a proposed legislation to increase by 2% the cost of living allowance (COLA) adjustment for retirees of the ASG Employees Retirement Fund (ASGERF) who retired on, or prior to Sept. 30, 2010.
“The American Samoa Government owes a debt of gratitude to the selfless dedication of its retired employees,” Lolo wrote to the Fono leadership in a Feb. 8 letter. “This legislation recognizes their invaluable contributions to our financial security.”
Lolo also urged the Fono to support the speedy passage of this measure, which would amend the current COLA increase. The letter included wording of the proposed bill.
The proposed legislation followed a recommendation from the ASGERF board of trustees, whose chairman Aleki Sene Sr. wrote to the governor last month, saying that the board had “unanimously” approved during its July 5, 2012 regular meeting a COLA for retirees with specific effective dates.
The information was conveyed to former governor Togiola Tulafono on July 6 for his review and submission to the Fono; unfortunately the 32nd Legislature ended without the COLA being submitted, said Sene.
According to the chairman, the proposed 2% COLA hike is recommended to be effective Feb. 1, 2013 and retroactive Oct. 1, 2010 — the last date the last COLA was approved and signed into law.
The Fund’s actuary — Sage View Consulting — has “estimated the actuarial accrued liability to increase” by $2.05 million ($2,056,766) “and that the actuarially funded ration will drop from 89.3% to 88.3%,” Sene explained.
He also says that the current employer contribution of 8.0% of gross pay is considered adequate to maintain the pension trust fund in an actuarially sound financial position.
“This proposed COLA would increase monthly annuities for 93% of our retirees. The number of retirees eligible and the amount of dollar increase in monthly annuity payments are based on date of retirement and the recommended percentage of COLA,” he pointed out.
In closing Sene thanked the governor for his consideration of this important legislative proposal for “our retirees” and looks forward to testifying in the Fono for its adoption.
Also included in Sene’s letter to the governor is the actuary report from Sage View Consultant and this “actuary report” is a requirement under law when there are any amendments to the retirement fund.
This information along with other data and investment portfolio of the ASGERF is expected to be presented to lawmakers at next week’s Retirement Fund board meeting in Honolulu.
As for the COLA proposal, it's expected to be introduced next month when lawmakers reconvene following the current three-week recess.