Senate committee tables bill to hike Retirement Fund local investment
Pago Pago, AMERICAN SAMOA — Following some very tense moments during a Senate committee hearing yesterday, the majority of senators agreed to table for future discussion — until early next year — the approved House version of an Administration bill seeking to raise the local investment rate from 17.5% to 35% for the ASG Employees' Retirement Fund.
Sen. Nuanuaolefeagaiga Saoluaga T. Nua insists that the committee should have an actuary report on the impact the proposed change would have on the Retirement Fund for review, before any decision is made.
While the Senate rejected its version of the bill more than a week ago, the House recently gave its endorsement with a 12-4 vote. The House version was the focus of the Senate Retirement Committee hearing yesterday morning, with no witnesses called because the committee had already heard from ASG officials during the hearing on the Senate version.
At the start of the hearing, Nuanuaolefeagaiga was the first to address the committee, noting the importance of the bill, which will help with “investment” for economic development in the territory through the Hawaiki submarine cable.
However, he argued that under provisions of the Retirement Fund statute, an actuary report is required from the Retirement Fund for review by the Fono when there are proposed changes to the law.
Such a report, he said, would provide the status of the Retirement Fund’s worth and assets. But there is no report for review by the committee, he pointed out, and quickly moved to table the bill, which can be taken up in the New Year, which is only three months away.
Sen. Fa’amausili Mau Mau Jr., seconded the motion, and also agreed that an actuary report is required under the law. He went on to argue an issue raised by Sen. Magalei Logovi’i during the same committee hearing more than a week ago, that once the $20 million loan from the Retirement Fund was paid off, the investment rate returns from 17.5% to the original language of 10%.
This issue is still not resolved and needs to be addressed before taking up any proposed changes to increase the local investment percent, he said, to which committee chairman Sen. Tuaolo Manaia Fruean asked if Fa’amausili has a copy of Attorney General Talauega Eleasalo Ale’s opinion on the percentage issue.
Fa’amausili said yes, but quickly added, “that is the Attorney General’s opinion” but the decisions are made by each individual senator on matters before the committee. He again argued that the local investment percentage rate should be addressed first.
Tuaolo, who is also vice chairman of the Retirement Fund board of trustees, pointed out that based on the AG’s opinion, there is no violation of current law, pertaining to changing the percentage of local investment. He noted that any differences in the interpretation of the law can be addressed by the court.
Tauolo further explained that if the proposed amendment to raise the local investment percent is approved and enacted into law, the board of trustees will then hold a meeting to consider any requests from the American Samoa TeleCommunications Authority.
As previously reported by Samoa News, provisions of the bill would allow ASTCA to loan from the Retirement Fund up to 35%; and during a Fono Joint Budget Committee hearing last month, it was revealed that ASTCA has a new $18.25 million proposal pending with the Retirement Fund — but it’s dependent on the Fono approving the hike of the local investment percentage rate. (See Samoa News Aug. 31st edition for details).
During yesterday's Senate committee hearing, Tuaolo said when the time comes, a request will be made for an actuary report.
There were two other senators who agreed with the motion to table the bill without any more discussions, arguing that the Senate has already made a decision on its version.
Sen. Fai’ivae Iuli Godinet, who is also chairman of the ASTCA board of directors, requested for the committee to continue its work on the important measure, saying Hawaiki is up and running — operating right now.
He reminded senators that there is no cap on off-island investment of the Retirement Fund and such investment is “high risk”, with about $60 million lost in the past. In addition, the Fono has no say when it comes to off island investment.
It was revealed during the hearing that Magalei on Sept. 18th had written to Talauega raising two questions for which the AG responded in a Sept. 20th letter, which was considered his legal opinion. One question was identical to the AG’s Sept. 4th letter to Tuaolo addressing the sunset provision of the law, rolling back the local investment from 17.5% to 10% after the $20 million is paid off.
According to the AG, the changes made to a provision of the law in Dec. 2008 authorizing the government to borrow $20 million from the Retirement Fund, eliminated the sunset clause, which was meant to roll back local investment after the loan was paid off. (See Samoa News Sept. 10th edition for details).
Nuanuaolefeagaiga said that is the AG’s opinion — referring to the Sept. 20th letter to Magalei — and insisted that an actuary report is required. Nuanuaolefeagaiga again requested that the committee first vote on his motion, which has already been supported by other senators, to table the bill until next year at which time all reports will be available for the committee to fully review the measure.
Tuaolo asked his colleague to be patient as the hearing moves forward while awaiting copies of the AG’s Sept. 20th letter for distribution to all senators.
Fa’amausili reiterated that the local investment percentage is rolled back to 10% after the $20 million loan is paid off, saying the Sept. 20th letter is the AG’s opinion but the Fono needs to first address this important issue.
Nuanuaolefeagaiga quickly echoed Fa’amausili’s comments and the pair appeared to be tag teaming in their arguments as Tuaolo continued to ask for patience — at least three more times — from the committee to allow other senators to address the committee.
Nuanuaolefeagaiga and Fa’amausili spoke over each other's statements directed to Tuaolo, arguing that the committee should vote first on the original motion before the hearing continues with statements from other senators.
With the senators having copies of the AG’s Sept. 20th letter in hand, Fai’ivae motioned for the committee to continue the hearing to next week, to give everyone a chance to throughly read Talauega’s opinion and any other new information.
But Nuanuaolefeagaiga again insisted that his motion from the start of the hearing should be voted on first, and this was supported by Fa’amausili.
However, Tuaolo pointed out that voting for Fai’ivae’s motion first will have the same outcome as Nuanuaolefeagaiga's request to have his initial motion voted on first.
He explained that if Fai’ivae’s motion is rejected, that means Nuanuaolefeagaiga’s motion is approved.
Tauolo then called for a vote — by hands — and five senators raised their hands in support of Fai’ivae’s motion, while six opposed it — the final committee decision is that Nuanuaolefeaiga’s motion stands and is therefore approved.
Two local long time political observers contacted by Samoa News after the hearing, said that, “in local politics, things can change overnight,” after decisions are made. Additionally, there are still 6-session days left in the current Legislative session, so things can change between now and when the current session officially ends — which is expected to be Oct. 3rd.