Monday, July 13, 2020

UN Pension Fund. Governance audit of investments. Changes at the top are not enough. The Secretary-General must clean house, 13 July 2020

UN Pension Fund. Governance audit of investments. Changes at the top are not enough. The Secretary-General must clean house on both sides of the Fund.

When the UN Pension Fund’s former Representative of the Secretary-General for Investments (RSG), Sudhir Rajkumar, left suddenly at the end of March, the Note to Correspondents from the Secretary-General’s Spokesperson on 29 March 2020, said that he had resigned and that the Secretary-General thanked him for his service.

At a virtual meeting of the New York UN retiree association, held on 23 June 2020, the Acting RSG, Pedro Guazo, in response to a question, repeated a quote attributed to the SG's spokesperson in a media article that the RSG had left because of  “personal and family reasons”. Guazo also confirmed that the expected internal governance audit of the Office of Investment Management (OIM) had been received.

OIM governance audit

While up to now, the matter of the situation in the Office of Investment Management (OIM) was mired in “he said/he and she said” (the former RSG’s responses to allegations by Fund staff representatives and a group of senior investment officers), the recently completed audit of governance mechanisms and related processes in OIM presents a picture of serious shortcomings in governance. 

Reading the audit also raises questions about the apparent failure of the Secretary-General’s advisers in taking mitigating action and a possible lack of transparency in reporting to stakeholders on the circumstances surrounding the RSG's sudden departure.

Some highlights of the audit (see attached Annex for detailed elements)

The audit notes that the merging of management and oversight functions as a result of misinterpreting a change in the Secretary-General’s delegation of authority to his Representatives, meant that the former RSG acted as both “player and referee” over investment proposals, with the ability to “stifle critical review …and compromise due diligence, including  risk analysis…” An added paragraph stated that the delegation of responsibility and authority was “personal” and “may not be further delegated.”

The merging of the management and oversight functions also weakened checks and balances and diminished the role of the Investment Committee. The RSG proposed not to reappoint two long-serving Committee members and nominated four new members. 

According to information not included in the audit,  one of the nominees  is the subject of media controversy (see 6 July 2020 article in ‘Institutional Investor’ linked in the Annex).

The audit observes that given that the Fund, unlike other funds, is not protected by national laws or justice systems whereby officials with fiduciary responsibilities may be held personally liable for the actions, an effective governance structure with segregation of critical roles is essential to avoid concentration of power and perceived or actual conflict of interests “to assure the soundness of investment decisions and maintain the confidence and trust of the Fund’s stakeholders, including the Secretary-General.”

Friday, May 22, 2020

UN Pension Fund: Why UN retirees should boycott FAFICS and its associations, May 22, 2020

The UN Pension Fund's  internal email system should not be used to support non-transparent and unrepresentative institutions such as FAFICS (the Federation of Associations of Former International Civil Servants) and its associations, including AFICS/NY (the New York chapter of the Federation).
Recently, the Fund administration circulated a membership letter on behalf of AFICS/NY to all Fund members through the Fund's internal email system.
I think it’s important to flag two issues here. One is that in terms of its current pension policies, FAFICS, the umbrella organization for AFICS/NY and other AFICS associations, practices taxation without representation.
For several years, the same person was both the president of AFICS/NY and FAFICS, and still continues, along with the Vice-Chair of the Pension Committee, to wield outsize influence in AFICS/NY, in FAFICS, and on pension matters on the FAFICS delegation to the pension board.
While recognizing efforts on the part of the current AFICS/NY leadership toward more transparency, it's a fact that its leadership, of the association with the highest membership among the 61 FAFICS associations, has been largely passive and complicit in these unrepresentative practices, including out of hand rejection of the proposal in OIOS' (Office of Internal Oversight Services) governance audit (A/73/341) that the Pension Board review modalities for UN retirees to directly elect our representatives to the Pension Board. One of the specious reasons offered by the FAFICS leadership for rejecting the proposal, is that FAFICS has no access to the UNJSPF membership!
It’s the reason that I continue to withhold my membership dues to AFICS/NY and recommend that others follow suit, until, at the very least, the membership of the FAFICS delegation to the Pension Board changes (see article linked below).

The second is the use of UNJSPF email system to disseminate messages from FAFICS associations. The OIOS comprehensive governance audit was explicit in describing various conflicts of interest between the FAFICS leadership and the management of the Fund, including the “appearance of collusion” in the use of the UNJSPF internal email system to disseminate a January 2018 letter from the then FAFICS president, containing several misleading statements to 200,000 plus Fund members, of which a small fraction-- 18,000 ---were FAFICS members. Yet, the FAFICS leadership consistently claims that it's the sole legitimate representative of all UN retirees.

Friday, May 1, 2020

UN Pension Fund: We must ensure we're solving the right problems. 2 May 2020

The online pension briefing organized by the UN Participant Representatives to the  Pension Board on Wednesday, 29 April 2020 was extremely informative and useful. I wish to thank them for organizing the event, and commend them for their dedication, commitment and persistence in working for the interests of Fund participants (active staff, whom they represent) and advocating for retirees in the matter of the continued health of our fund.

I wish also to raise issues concerning the briefing, and a recent Passblue article, for which it is imperative that independent facts be established in order to ensure we're solving the right problems.

Informal summary (below)

I have prepared an informal summary below this note,  structured according to the presentations on i) developments at the Fund; ii) benefits; iii) investments; and iv) questions and answers; v) cost savings; vi) and closing remarks). 

I wish to stress that this summary is unofficial and offered solely for information of interested fund members, who may also wish to visit the following link to replay the recorded live event. 

Thursday, April 23, 2020

UN Pension Fund information session on investments, April 29, 2020

Pension Fund information session on the situation regarding investments
As your representatives on the Pension Board, we would like to welcome you to our next pension information session, which will take place online on Wednesday 29 April from 3 to 4.30 pm Central European Time (9 to 10.30 am New York).
Our guest, in charge of managing the Fund’s investments, is Acting Representative of the Secretary-General Pedro Guazo. He will make a presentation on the situation regarding the Fund’s investments and will answer your questions.
We decided to hold this session following our recent broadcast ( detailing developments at the Fund and your feedback to us.
The agenda is as follows:
  • Briefing on recent developments at the Fund (participant representatives – 5 minutes)
  • Presentation on the situation regarding the Fund’s investments (Pedro Guazo – 15 minutes)
  • Questions and answers.
Please use this Teams Live link ( to join us on the day. You may also send questions in advance to the following link ( so that we can ensure that your concerns are addressed.
Kind regards,
Ibrahima Faye, Mary Abu Rakabeh, Bernadette Nyiratunga, Aissatou Ndiaye, Ian Richards, Michelle Rockcliffe

Friday, April 17, 2020

UN Pension Fund: Message from your representatives on the status of the Pension Fund, 17 April 2020


From: BROADCAST United Nations <>
Sent: Friday, April 17, 2020 2:51:52 PM
To: Broadcast - ALL UN Secretariat
Subject: Message from your representatives on the status of the Pension Fund // Message de vos repr√©sentants sur le statut du Foncds de pension

Dear Colleagues,

As your representatives on the UN Pension Board, many of you have been in touch with us to ask about the latest developments at the Fund.

These include concerns raised by us with regards to how the Fund’s Office of Investment Management was being administered in light of financial risk, the subsequent replacement of the Fund’s head of investments (known as the Representative of the Secretary-General, or RSG) and the financial impact of recent market movements.

We know that for many of you, the Fund represents your only source of social security and retirement income. 

That is why we are following matters closely and have been in contact with the new, Acting RSG to urge the safe and conservative management of the Fund’s assets, and request greater sustainability and transparency - two important values in these financially volatile and difficult times. We will be reporting back to you in due course with a clearer picture.

Thursday, April 16, 2020

UN Pension Fund: Changes in the head of investments in the midst of Covid-19. Where's the internal audit report? 16 April 2020

The Secretary-General’s letter of 14 April to Fund members raises more questions than it answers. What really caused the sudden departure of Sudhir Rajkumar,  the Secretary-General’s Representative for Investments (RSG)  and what’s being done to address any underlying issues to ensure our Fund’s continued health during Covid-19 and beyond?

Fund members were surprised to learn, on 29 March, that Rajkumar had abruptly resigned. One moment, on Friday, 27 March, he was posting an investment report on the Fund’s website, the next moment it was removed, and  two days later, he resigned.

The Secretary-General’s renewal of Rajkumar’s two-year contract last December, in the thick of a year of internal tumult in the Office of Investment Management (OIM), sent a signal of confidence in his RSG, wittingly or not. So much so, that even close observers of the Fund didn’t see Rajkumar’s abrupt departure coming.

Rajkumar’s surprise exit came about two weeks after, on 12 March, a UN Participant Representative to the Pension Board sent an open letter to the SG (not made public), reiterating concerns and allegations stated in an earlier letter to the SG by the UN participant representatives, on 21 October 2019. An internal investigation and audit were reportedly conducted following receipt of the letter.

Letter from the UN Secretary-General to UNJSPF participants, retirees and beneficiaries, 14 April 2020

Letter from the UN Secretary-General to UNJSPF participants, retirees and beneficiaries


"It is undeniable that the present volatile state of the financial markets, triggered by the global Coronavirus pandemic, has affected the value of the Fund ‘s assets. After a positive performance in 2019, we entered this year with an 18.68 percent annual return helped by rising equity markets which saw the portfolio reach a level of $72 billion. With the market downturn in the first quarter of 2020, the changes in the value of our portfolio are consistent with the trend observed in the markets more generally, with a decrease of approximately 10 percent. It is important to recognize, however, that changes in the valuation of the underlying assets of the Fund do not mean that the Fund incurred actual losses where such assets have not been sold.
Given that the COVID-19 pandemic is still unfolding, we expect the volatility in the markets to persist in the weeks to come. Yet we do not foresee any disruption for beneficiaries as the Fund ‘s liquidity is strong.  I can assure you that all pensions will continue to be paid in full."

Read full letter here: