Senate President urges ARPA interest be used to settle debt to retirement fund

Pago Pago, AMERICAN SAMOA — The American Samoa Government has earned $14 million in interest from ARPA funding deposited with Zions Bank. This was confirmed on Thursday by the government’s former Treasurer, Donald Kruse, during a joint meeting of the legislative budget committees, following an inquiry from Senate President Tuaolo Manaia Fruean.

Earlier, on Wednesday, Tuaolo had asked the then Treasurer about plans to settle the government’s debt of $14 million owed to the American Samoa Government Employees Retirement Fund (ASGERF), pointing out that the interest held at Zions Bank should be used to pay down that debt. In response, Kruse said that consultation with the Governor was needed to discuss the issue.

Tuaolo highlighted that this presents an opportunity for ASG to address its obligation to the Retirement Fund and underscored the importance of protecting the Fund and the contributions made by employees.

It should be noted that Tuaolo also serves as the chairman of the Board of Directors for the American Samoa Government Employees Retirement Fund. He is one of the two members of the Fono that are required to sit on the Board. The other is from the House of Representatives.

During his inquiries, Senator Tuaolo sought further clarification on Kruse's proposed plan for addressing the outstanding obligation.

Treasurer Kruse explained that the government is actively working on collecting duties and taxes owed. He also pointed out that 75 percent of the ARPA funding deposited at Zions Bank remains unused and is accruing interest. Furthermore, he noted that once these funds are reinvested in the economy, they could enhance revenue generation, as evidenced by the funds collected through the Department of Education’s ARPA initiatives in 2022 and 2023.

Senator Tuaolo urged the Treasurer to consider using the interest generated from the ARPA funds at Zions Bank, specifically to address the retirement fund debt. He referenced a recent meeting with the Speaker of the House and the Treasurer, during which they explored the possibility of utilizing this interest to help reduce certain outstanding debts.

The Treasurer attempted to clarify that there are currently $293 million in unused ARPA funds; however, Tuaolo expressed dissatisfaction with this response. He reiterated that his primary concern is not with the ARPA funds themselves but rather with the potential to use the accrued interest to reduce the pressing retirement fund debt.

Treasurer Kruse explained that the oversight of ARPA funds falls under the jurisdiction of the ARPA office and its Director, not directly under his authority.