ASGERF board members re-nominate themselves
The five current members of the board of the American Samoa Government Employees Retirement Fund (ASGERF) have re-nominated themselves for the Fund’s board of trustees, in accordance with local statute. The nominations were forwarded to the governor for review and consideration, as of Wednesday, in a Feb. 13 letter to the governor.
However, yesterday, according to information from the governor’s office, only one of the five members has been re-nominated to the board by Gov. Lolo Matalasi Moliga. The governor’s new appointments are Brant Judy, John Marsh, Talalemotu Mauga, Vince Haleck, and Su’a Schuster.
Official notice is to follow soon. Brant Judy is the sole remaining member of the old board of trustees.
STATING THEIR CASE TO CONTINUE
In a Feb. 13 letter to the governor, the current board of trustee’s chairman Aleki Sene Sr. noted that local statute (Section 7.1410 ASCA) does require all new board members to be appointed by the governor in “consultation with the board, and confirmed by the Legislature.”
A trustee can be removed from the board by the Governor only for breach of fiduciary responsibilities or for just cause.
“These nominations are made with the understanding that their terms are in a staggered arrangement as also required by law. It is by that statutory mandate, and in furtherance of our fiduciary duties as trustees that we make the following recommendations,” Sene wrote in his letter to the governor.
Re-nominated by the board themselves were: “Magalei Logovii’s replacement” for a term of five years; Sene for four years; former lieutenant governor Faoa Aitofele Sunia for three-years; former executive of GHC Reid Co., Brant Judy for two-years; and veteran local businessman Fanene Morris Scanlan for one-year.
A notation in the letter states that the “replacement” for Magalei “was nominated in a letter to you on January 8, 2013” — but provided no other information.
Samoa News should point out that over the past four years, lawmakers have questioned Sene when he appeared during committee hearings regarding new members of the board for submission to the Fono. Sene testified that nominees had been submitted to the governor in consultation with the board, for Fono confirmation.
In his letter to Lolo, Sene said that in the past the current board sent several nominations “to your predecessor, unfortunately the confirmation process was never allowed and this board was left to operate as is.”
He also informed Lolo that “these nominations were not made lightly, rather, they are the result of careful consideration given the board’s statutory mission and the current state of the Fund.” (The ASGERF has net assets that have surpassed the $200 million mark as of last year.)
Sene wrote, “This board, in keeping with the spirit of the law and intent of the Legislature in creating the ASGERF, does believe that these nominations are justified and deserve your serious and favorable consideration” due to the health of the fund — its consistent growth.
“Although the Fund did experience some slow-growth in 2008 and 2011, it was attributed to foreign market conditions that were outside of the board’s control and it was a situation that was common to pension plans across the nation and not exclusive to the ASGERF,” Sene explained.
“But despite those conditions, this board remained committed to gaining back what was lost and was successful in doing so,” he said. “The board is happy to report that at the end of 2012, the Fund gained over $19 million to push its net assets over the $200 million mark.”
Sene explained that one of the main measures of a healthy pension plan is the “actuarial valuation funded status” and at this time, when similar seized pension funds in the Pacific and the nation were suffering from low funding ratios, American Samoa’s Fund “was enjoying a very strong funded status of around 90%.”
“This has consistently been the case of our Fund due to the Board’s relentless efforts,” he said and noted that of the 125 pension funds surveyed and monitored by the National Association of State Retirement Administrators, American Samoa’s pension fund is ranked 15th.
“That is a staggering accomplishment by anyone’s measure. What is even more impressive is the fact that since the Fund was established in 1971, the employee contribution rate was raised only once back in 1981,” he said. “This board has been able to maintain employee contributions at 3.0% for more than 30 years, keeping it at a level that is affordable to ASG employees yet still allowing for Fund growth and sustainability.”
(Contribution by ASG as the employer is 8.0% of gross pay of each member of the Fund)
On the Fund benefits side, Sene said in his letter to the governor that this board has been a champion of increased benefits for Fund recipients. For example the board has “consistently resolved” to increase the Cost of Living Adjustment (COLA) for retirees and beneficiaries in order to keep up with the annual increase in actual growth.
“Even during those years when the global financial markets were unstable, the board was able to recommend a COLA increase,” Sene noted. And when the U.S. Social Security Administration “refused” to approve a COLA in 2010 and 2011 [for social security recipients], Sene said, the “Fund beneficiaries enjoyed a 2% and 4% COLA increase for those respective years.”
“I need not explain how much those adjustments could not have come at a better time for most Fund beneficiaries. With proper management by this board, the Fund was able to withstand the financial climate then,” said Sene.
According to the chairman, this group of trustees has been together since 1998 and their continuity is a key element in making the Fund successful and keeping it viable. “Each member brings with him years of leadership and experience which are key to the Fund’s growth and stability,” he said. “Each of these trustees possess a distinct knowledge from their respective professions and backgrounds that when combined have culminated in success.”
In addition to their personal and professional credentials, they have undergone extensive education and training as trustees through the attendance of national pension plan conferences and seminars where they have acquired the art of making sensible investment and management decisions, the board chairman said.
“In keeping with best practices, the Fund is audited annually by an independent accounting firm. Through the oversight of this board, the Fund has received ‘unqualified opinions’ since its establishment,” he said.
Sene said one of the “proud accomplishments of this board” is the construction and operation of the three-story Centennial Building in Utulei, which was commissioned to commemorate the 100th anniversary of American Samoa as a U.S. territory.
(Moss and Adams’ FY 2011 audit of the Fund states that the building, which has an original cost of $7.3 million, has a current estimated fair market value of $5 million, and this is a real estate investment.)
He said the building “serves as a symbol of the ASGERF success” and it is a tribute to those men and women who have given their better years to government service and a testament to smart investment and competent management.
“This board is proud of its track record for success which is why the current trustees are resubmitted as nominations for confirmation. As trustee, we have a fiduciary duty to protect the Fund by acting in its best interest,” Sene said.
According to Sene the board is also ready to consult with the governor on all nominees in order to fulfill its statutory duties and the board looks forward to that opportunity and hopes to meet with the governor soon.