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Report: No need to up the retirement fund ante now

The ASG Employees Retirement Fund’s (ASGERF) “net growth” increased by more than $10 million in fiscal year 2013 from the previous fiscal year, according to the Dec. 31, 2013 ASGERF newsletter distributed recently to lawmakers, some of whom sought late last month the most recent financial report of the Retirement Fund.


Lawmakers looked for a Fund update after Gov. Lolo Matalasi Moliga told the Fono in his State of the Territory address that the Retirement Fund’s “Unfunded Liability” as of 2012 was $48.46 million and the administration is looking at a total increase of 5% in employer and employee contribution to cover those liabilities, which continue to increase.


Lolo said the administration is working on addressing this issue through appropriate legislation to be presented to the Fono later this year.


Samoa News understands lawmakers are expected to receive soon the financial statements, including the FY 2013 audit statement. Additionally, some lawmakers also want details on the “Unfunded Liability” issue.


Based on the ASGERF’s most recently audited financial statements for fiscal year ending 2013, the “Fund’s net position was $210,906,897 [or $210.90 million], a net growth of over $10 million — $10,765,686 specifically — from FY 2012, according to the newsletter, which also states the unfunded liability for 2013 is $52.5 million.


A break-down of the financial statement shown in the newsletter states that total net assets at the end of FY 2013 are $211.46 million, while net assets for FY 2012 stood at $200.71 million (which was also the net asset previously reported by Samoa News based on the actual audited financial statement for FY 2013.)




The newsletter noted that since the establishment of the Fund in 1971, revenues received from both employer and employee contributions are "really not enough to cover payments paid out to retirees every month.”


On an annual basis, that variance between contributions and benefit expenses has increased by more than $10 million per year, it says, noting, “however, the results of the 2013 Actuarial Valuation Report show the funded status of the Fund continues to be strong.”


Therefore, both employee and the employer contributions will remain at 3% and 8% this year.


As of SageView Consulting’s Actuarial Valuation Report of Oct. 1, 2013, “We believe the policy rate of 8% in conjunction with the employee contrition of 3% is sufficient to support the benefits and administrative expenses of the fund in the short term, however emerging market performance and other experience will dictate whether this combined contribution rate will be sufficient in the long term,” according to the newsletter.


Samoa News should point out this was identical to the SageView Actuarial Valuation Report for FY 2012.