Pago Pago, AMERICAN SAMOA — The American Samoa Government Employees’ Retirement Fund (ASGERF) posted a strong financial performance for fiscal year 2025, but newly released audit and actuarial reports highlight ongoing concerns about unpaid government contributions and a growing gap between required and actual funding.

According to the FY2025 audited financial statements, ASGERF’s net position increased by approximately $24.8 million, bringing total assets held in trust for pension benefits to about $233 million at the close of the fiscal year.

The improvement, however, was driven almost entirely by investment returns rather than contributions.

The audit shows the Fund earned about $23.4 million in net investment income, meaning that roughly 94% of the increase in net position was attributable to market performance, not employer or employee payments.

UNPAID CONTRIBUTIONS CONTINUE TO GROW

At the same time, the audit reveals a significant increase in unpaid contributions owed primarily by the American Samoa Government (ASG). As of September 30, 2025, contributions receivable totaled approximately $20.2 million, up sharply from $5.06 million the previous year. The audit notes that ASG alone accounted for about $17.9 million of that balance, which had increased to roughly $20.2 million by December 31, 2025.

This means that while ASGERF reported $31.2 million in total contributions, only about $16.1 million was received in cash, with the remainder still outstanding. Under accounting rules, contributions are recorded when due, not when paid, which can give the appearance of stronger revenue than what is collected.

FUND OPERATING WITH CASH DEFICIT

A reconstruction of the Fund’s cash position shows that ASGERF is operating with a significant annual cash shortfall.

For FY2025, the Fund paid out approximately:

$26.5 million in pension benefits,

$1.7 million in refunds to members, and

$1.6 million in administrative expenses, for total cash outflows of about $29.8 million.

By comparison, actual cash inflows — including contributions received and cash investment income — totaled approximately $20.4 million, resulting in a cash deficit of about $9.3 million for the year. This deficit was effectively covered by investment gains, including $19.9 million in net appreciation of investments, which are not cash unless assets are sold.

ACTUARIAL REPORT: CURRENT RATES BELOW REQUIRED LEVELS

The October 1, 2025 actuarial valuation confirms that contribution rates remain below what is needed to sustain the system over the long term. The actuary recommended an employer contribution rate of 17.55% of payroll, compared to the current statutory rate of 14%. This represents an annual funding gap of approximately $4.8 million. In addition, the report notes that since 1998, cumulative contributions have fallen short of actuarial requirements by approximately $110.96 million.

For FY2025 alone:

Required employer contribution: $33.8 million;

Actual employer contribution: $21.6 million;

Shortfall: $12.15 million

This means only about 64% of the actuarially required contribution was funded for the year.

FUNDED STATUS IMPROVES, BUT RISKS REMAIN

The actuarial report shows that the Fund’s funded ratio improved to 61.7%, up from 56.6% in the prior year, while the net pension liability declined to approximately $144.5 million. Despite the improvement, the report cautions that the system continues to depend heavily on investment returns and future contributions to meet its long-term obligations.

CONCERNS OVER POSSIBLE RATE REDUCTIONS

The findings come at a time when there have been discussions about reducing employer contribution rates. Based on actuarial data, lowering the employer rate from 14% to 8% would reduce annual contributions by approximately $8 million to $9 million, significantly widening the funding gap. A return to earlier combined rates of 11% (8% employer and 3% employee) would result in contributions that are less than half of the actuarially recommended level.

BOTTOM LINE

While ASGERF’s financial position improved in FY2025, the reports make clear that the gains were driven by investment performance rather than consistent funding.

The combination of $20 million in unpaid contributions, a $9 million annual cash deficit, and contribution rates below actuarial requirements raises questions about the long-term sustainability of the retirement system if current trends continue.

As lawmakers review the Fund’s status, the central issue remains whether contribution levels will be strengthened — or reduced — at a time when the system is already operating below recommended funding levels.

(Sources: ASGERF Actuarial Valuation Report FY2025, ASGERF Financial Statements FY2025)