New admin bill introduced to increase contributions to the retirement fund

Pago Pago, AMERICAN SAMOA — The Administration is taking another shot at a bill to increase the government’s and members’ contributions to the American Samoa Government Employees Retirement Fund (ASGERF) and it was introduced in the House of Representatives yesterday morning.

The bill had been scheduled for this past Friday, however, without a quorum, the House was unable to transact any business.

The admin bill was introduced by Vice Speaker Fetu Fetui Jr and was transferred to the House retirement committee for a hearing.

According to the preamble of the bill, the ASG’s contribution rate for the retirement fund has remained at 8.00% for at least the past decade, and the fund had a $9.4 million shortfall in FY 2019.

The bill also says that the total of ASG’s (8.00%) and employees (3.00%) contribution rates must increase from 11.00% to 20.37% in order to reduce the shortfall and the bill proposes incremental raises.

It notes that it is imperative to increase the government’s contribution rate to prevent the fund from becoming insolvent in the next decade.

For government contributions to the fund, ASG shall contribute:

(1)       12% of compensation earned and accruing to each member from October 1, 2023 through September 30, 2024.

(2)       14% of compensation earned and accruing to each member after September 30, 2024.

For members’ contribution to the fund, each member of the fund shall contribute:

(1)       4% of compensation earned and accruing to each member from October 1, 2022 to September 30, 2023;

(2)       5% of compensation earned and accruing to each member from October 1, 2023 to September 30, 2024; and,

(3)       6% of compensation earned and accruing to each member after Sept. 30, 2024.

If passed and signed into law, this bill shall become effective with the new fiscal October 1, 2022.