AG: Retirement Fund law has no “sunset” on local investment hike
Pago Pago, AMERICAN SAMOA — Changes made to a provision of the law in Dec. 2008 authorizing the government to borrow $20 million from the ASG Employees Retirement Fund, eliminated the sunset clause, which was meant to roll back local investment from 17% to 10% after the loan was paid off.
This is according to Attorney General Talauega Eleasalo Ale, in a Sept. 4 letter to Senate Retirement Committee chairman, Sen. Tuaolo Manaia Fruean, following a committee meeting in the morning of the same date, where Sen. Magalei Logovi’i raised several questions regarding the sunset clause.
Talauega was one of the two government witnesses who testified before the committee on the Administration bill, which seeks to raise local investment by ASG Employees' Retirement Fund from from 17% to 35%. The measure was disapproved by the Senate in final reading last Wednesday. (See Samoa News edition Sept. 6 for details.)
(Samoa News notes that Talauega letter’s used 17.5% — which appears to be the correct percentage — and not 17%).
In his Sept. 4 letter, Talauega said he wanted “to clarify” the issue raised by Magalei during the committee hearing, on “whether the current cap should be 10% instead of 17.5% as stated in the current version of the Code [the law].”
Magalei had pointed to Public Law 30-29 enacted Oct. 29, 2008, which contained a sunset provision requiring that the Retirement Fund’s investment cap return to 10% after the $20 million ASG loan is paid off, according to the AG.
Talauega explained in his letter, which was also copied to Magalei and the Retirement Fund Office, that the $20 million loan in question was first approved on Apr. 23, 2007 in the 30th Legislature — through Public Law 30-5, which also increased the investment cap from 10% to 17.5%. He said Public Law 30-5 contained the sunset provision as in Public Law 30-29.
According to the Attorney General, changes were made to the distribution of the $20 million loan on Apr. 10, 2008 in Public Law 30-14, which also included the same sunset provision.
Then on Oct. 29, 2008, Public Law 30-29, came into existence providing further changes to the distribution of loan proceeds with the sunset provision still intact.
However, on Dec. 7, 2008, before the close of the 30th Legislature, the Fono and the Governor made final changes to the $20 million loan under Public Law 30-34, “which eliminated the sunset provision,” from the final codified version of the law, he explained further.
Unlike Public Laws 30-5, 30-14 and 30-29, he said, Public Law 30-34 did not include the sunset provision.
“This evidence proves that, while the Fono and the Governor may have considered insertion of the Sunset Provision in previous versions of the law, in the end, they decided to leave it out,” he points out.
“This explains why there is no sunset provision” in the current version of the law, which was last updated by the Fono in January, 2017, according to Talauega, adding that he hopes the information provided to the committee will help in consideration of the bill.
As reported by Samoa News last week, the proposed law has yet to be introduced in the House of Representatives. And it’s unclear as to when this will be done.