Saturday, November 28, 2015

Pension matters: Obfuscation on hedge funds and 'absolute return', November 29, 2015


ˈäbfəˌskāt/, verb
  1. - render obscure, unclear, or unintelligible.

Pension matters update:

The draft Memorandum of Understanding with its potential risks to the system of checks and balances that has kept our Fund healthy for 65 years was placed in the deep freeze by the Under-Secretary-General for Management, Yukio Takasu, this past July and, hopefully, will remain safely on ice. Still, despite consistent and more frequent reporting in the media (see previous post titled 'Pension gaps remain while hedge funds gorge on fees'), it's unclear to what extent the reality of the pitfalls of riskier investments such as hedge funds has been taken on board by the Fund's investment decision-makers, i.e., the RSG, the Investments Committee, the Pension Board, or, for that matter, by the leadership of our UN retiree representative organization, AFICS. 

We're currently wading through the report of the Pension Board Chairman to the Fifth Committee (Nov. 10, 2015), and the Pension Fund's report to the GA (August 14, 2015) posted on the AFICS website (links below). 

The report is posted on the AFICS website with no comment.  We look forward to the day that the AFICS leadership might consider going a step further to provide some brief commentary on the most relevant sections of these, often specialized and technical, reports (206 pages long in this case) for the benefit of its membership.

Pension gaps remain while hedge funds gorge on fees, November 29, 2015

See recent media articles on the pitfalls of alternative investments such as hedge funds (links and excerpts below). The New York Times November 20, 2015 article was delivered on the same day by UN Pension Blog to the office of the Secretary-General's Representative for Investments (head of the Fund's Investment Management Division), with a cover note, for her 'consideration'.

THE NEW YORK TIMES:  November 20, 2015: 'Why Pension and Hedge Funds Don't Mix'

Excerpt: "Rosy promises about hedge fund returns can hurt future retiree pension plans. Year in and year out, public pension managers invest in hedge funds that promise market-beating returns. The stated aim is to narrow the gap between what the pensions have promised future retirees and the money available to meet those obligations. What happens instead is that the pension gaps remain while the hedge funds gorge on fees."

Monday, October 19, 2015

Pension Fund: Next Certificate of Entitlement (Ce) to be sent in 2016

For information: Letter dated 12 October 2015 from the CEO, UNJSPF with cover email below to FAFICS/AFICS presidents and/or representatives (received via AFICS/NY on 19 November 2015):

Subject: Next Certificate of Entitlement (CE) to be sent in 2016

"Dear  FAFICS and AFICS presidents and/or representatives, 

Please find attached a self-explanatory note on the decision taken by the Fund to change the distribution cycle of the Certificate of Entitlement (CE) process. 

It would be very much appreciated if you could disseminate this information among your members. For your convenience we're sending you the note in English, French and Spanish."

Sergio B. Arvizú 
Chief Executive Officer, UNJSPF 
Tel: (212) 963-7041, e-mail:
Room DHP-3809Visit our website: 

See links to information notes in English, French, and Spanish below:

Monday, September 28, 2015

Pension matters: Make no mistake. The threat has abated but unreliable AFICS/NY leadership is still in place! 28 September 2015

Make no mistake. The threat may have abated temporarily, but the same unreliable AFICS/NY President and leadership are in place. We’re at an important juncture where every participant and beneficiary of the UN Pension Fund must take cognizance of the experience of the past year. 

For the first time in many years, we were faced with risks to the system of checks and balances that have kept our Fund safe and healthy for the past 65 years when others failed. The AFICS/NY President and Governing Board acted against the interest of AFICS members by supporting the draft MOU, dismissing our concerns about media reports about a move to riskier investments, and opposing at every turn the signing of a petition to the Secretary-General asking him to ensure that the system of checks and balances was maintained.

AFICS/NY President and Governing Board, letter of 23 September 2015: No shame!

28 September 2015

To: Ms. Linda Saputelli,  AFICS/NY President
Copy: AFICS/NY Governing Board

Dear Ms. Saputelli,

Subject: Request for an extraordinary meeting of the AFICS/NY Governing Board

We cannot fail to respond to your letter of 23 September 2015, which we consider an affront to all members of AFICS, who look to the Board for transparent, legitimate and honest representation

Concerning the request dated 12 June 2015 of 82 AFICS members, under the By-Laws, for a meeting on pension matters, we find it disturbing that following more than three months of correspondence containing a series of excuses, you now resort to a perverse interpretation of the AFICS By-Laws to justify non-compliance with its provisions. Since the Board includes several members with legal training and experience, it is indeed bizarre that the plain meaning of the statutes’ language has been so blatantly misused and contorted to satisfy yet a new excuse for not holding the requested General Meeting.  But it doesn’t require advanced legal training to understand that nothing in the By-Laws requires “individually signed requests.” By adopting this tactic you treat your dues-paying members with complete disrespect.

Wednesday, September 23, 2015

Game changer: AFICS/NY President response to request for meeting under the Bylaws: Sorry, we changed the rules! No meeting -- and matter closed!

Game changer: AFICS/NY and Governing Board: a model of responsibility and accountability to its dues-paying members.

On 12 June 2015, 82 AFICS members sent a letter to the AFICS/NY President and Governing Board requesting a meeting on pension matters. In their first response (23 June) we heard about “legal and practical constraints” before a date and a formal agenda could be set; next (25 June) there were  “critical practical constraints and possible legal issues”; on 2 July, we had “the By-Laws do not impose a specific time-frame; then on 9 July, it was the MOU is on hold, there’s no rush; we can plan a proper meeting.  In the latest response, on 23 September, we have ‘rule change; we need individual signed letters by 50 members, plus we don’t know why you needed a meeting in the first place, and as far as we’re concerned, the matter is closed!" 

The AFICS/NY Governing Board has asked me to convey to you its reply to a message
received by the Board from Loraine Rickard-Martin on 17 September 2015.

We would first recall the background and the context in which you made your request for an
extraordinary meeting of the AFICS/NY membership. The day after the annual meeting of the
AFICS/NY Annual Assembly that was held on 4 June 2015, the Association’s Governing
Board received a request from you to convene soonest an extraordinary meeting of the
membership and citing Article 4, para. 3 of the AFICS/NY By-Laws. You followed it up on 12
June with a list that you stated was sent on behalf of 82 AFICS/NY members, some of whom
later indicated to AFICS/NY officers that they were not aware of having endorsed such a
request. Moreover, 8 are not AFICS/NY members. You insisted that the meeting should take
place before the 62nd session of the United Nations Joint Staff Pension Board, scheduled for
20-24 July 2015.

Thursday, September 17, 2015

Pension Matters. Open letter to the AFICS/NY President and Governing Board: Your attention, please. (17 September 2015)

Dear Madam President and Governing Board,

I am writing to request your attention to two outstanding matters related to the AFICS By-Laws and inquire about any action that you and the Governing Board have taken or intend to take.

The first matter concerns elections to the Governing Board required under AFICS By-Laws as follows:  

“Article V. The Governing Board.  4.  The Governing Board shall be convened by the retiring President as soon as possible after the annual meeting of the Assembly. It shall at its first meeting elect from its membership a President, a First Vice-President, a Second Vice-President, a Secretary, a Treasurer, a Deputy Secretary and a Deputy Treasurer.”

Friday, September 4, 2015

Pension matters: the AFICS/FAFICS President seeks to reassure her constituency -- inquiring minds. That’s us! 4 September 2015

The AFICS/FAFICS President newly returned from the Pension Board meeting held from 20 to 24 July 2015, described in her ‘Highlights’ of the meeting (5 August 2015) her continued full-throated support for the revised draft Memorandum of Understanding granting the Fund CEO more ‘flexibility’. (You may recall that USG Takasu placed the MOU on hold on 10 July 2015). The President's 'Highlights' also included a  lament she'd delivered at the Board about “polemics, agitation, distraction” (that’s us!) that had “damaged” the image of the UN and the Fund.

The day before, on 4 August, she wrote a letter to the Secretary-General in which she described herself as ‘uneasy’ about issues related to the appointment of the Fund's Investment Committee and revision to the financial rules (see links below to her letters of 4 and 24 August, and Mr. Takasu’s reply of 21 August).

Friday, August 21, 2015

Pension payments on ice: Is it still not our business, Madam President? 21 August 2015

So, according to the message below from the UN Staff Union, the new IT system put in place by the Pension Fund to improve client servicing is instead doing the opposite by slowing things down.

I understand and appreciate the helpful spirit in which the Union is proposing that staff facing retirement accumulate leave and other reserves to tide them over for several months until their first pension payment arrives.  

Still, given the deleterious effects of this slow-down, and the new UN policy that the SG inaugurated by firing the head of MINUSCA over allegations of sexual abuse by UN peacekeepers, perhaps the SG needs to consider similar action against the bright spark who led the Fund to this point. According to the note, in an effort to mitigate the severe delays in pension payments,   “widows and  staff with disabilities” are being accorded priority in client servicing.

Monday, August 10, 2015

Hedge Funds. Fatal Distraction. Pension schemes should avoid an expensive form of fund management. (10 August 2015)

Dear colleagues,

Pension funds and hedge funds – article ‘Calpers’, The Economist

I have just returned from a short holiday to read 'The Economist' newspaper for August 1 to 7, 2015.  One of the leading articles is about public sector pension funds and hedge funds, which may be of interest to us (link below). 

The leader observes that in recent years hedge funds have not been doing any better than ETFs (straightforward investments that any individual can make).  The article also observes that "Instead of aiming at the very wealthy, the hedge fund industry now targets institutions such as pension funds."  

The article adds that Calpers, the giant Californian public pension fund, "has concluded that putting money into hedge funds is not worth the bother."  The Economist evidently shares that conclusion, commenting: "For the pension schemes that are the hedgies' latest target, handing over cash makes no sense."

I can only imagine that our pension fund will be targeted in due course, if it has not already been targeted.

Best wishes,

Chris Ronald

Thursday, August 6, 2015

Pension matters: Wolf in sheep's clothing! 6 August 2015

Matthew Chip Bhima Hogan

Pension matters: when the wolf goes after the fox! 6 August 2015

I’m taking a stab at making sense of the AFICS/FAFICS President’s  recent actions as set out in her letter to the Secretary-General dated 4 August 2015 and her  “Highlights from the 2015 Pension Board meeting” dated 5 August 2015 (both posted on the blog and on the AFICS website).

The AFICS/FAFICS letter to the SG sounds some of the right notes  -  notes that eerily evoke the tune some of us have been singing for quite some time and to which she seemed to turn a deaf ear up to now.

Granted, she says the issues she’s now ‘uneasy’ about have emerged from the Pension Board meeting. Perhaps if she’d listened to her constituents more closely, she could have had a head start before the meeting.  

AFICS/FAFICS President to constituents: MOU is my business, not yours!


5 August 2015
Highlights from the 2015 Pension Board
At the Pension Board meeting held in July 2015, FAFICS took positions and made interventions on behalf of retirees on critical matters of interest.
A paramount concern of FAFICS was the management of investments.  FAFICS pointed out that that the one-year terms proposed by the RSG for the members of the Investments Committee were at variance with the three-year terms specified in the Fund’s Regulations. The absence of a Chair since the resignation of the former Chair this past spring was also troubling.
Another area of concern was the drafting of new Fund-specific Financial Rules for the Pension Fund, scheduled for 2016.  FAFICS stressed the significance of having all parties agree to the draft Financial Rules and to any issues arising from them before they are submitted to the Pension Board.  It also recalled the bifurcation of the financial activities of the Fund and expected that Rules that would provide for a single framework in the financial

FAFICS President to SG: Uneasy about the RSG. Please correct promptly!

PALAIS DES NATIONS – CH-1211 – GENEVA 10 – SWITZERLAND Tel: 41-22-917-2225
Dear Mr. Secretary-General,
4 August 2015
I write on behalf of member associations of the Federation of Associations of Former International Civil Servants (FAFICS) and some 72,000 retiree members who depend on their United Nations pensions for their income in retirement from the member organizations of the United Nations Joint Staff Pension Fund (UNJSPF). Following the sixty-second session of the UNJSP Board held at Geneva from 20 to 24 July, our Federation wishes to draw to your attention some matters that have emerged from the Board discussions and which are of concern to us.
While the Pension Fund is apparently financially healthy at present, some longer-term aspects of the management and governance of the investments of the Fund, as well as the prospective new Financial Rules for the Fund make us uneasy.

Wednesday, July 29, 2015

Update: Pension Board meeting: a doozy by several accounts and MOU on ice! (29 July 2015)

By several accounts, last week’s Pension Board meeting in Geneva (20-24 July 2015) was a doozy (Merriam-Webster definition: “something that’s unusually good, bad, big, severe.”) Pick one or pick all; the meeting seemed to have been all of the above. While we await a Staff Union summary, which we’re told will be coming shortly, we’ve received and posted here the FICSA and CCISUA statements, highlights below, and we also received an email circular from retiree colleague Julie Thompson yesterday. If what we're reading and hearing is any indication of the overall mood of the meeting, it was shall we say, not a comfortable environment for anyone yearning for a new MOU any time soon. 

Brett Fitzgerald on behalf of FICSA felt unwelcome, he said, thanks to the efforts of some Fund Secretariat and Board members who had conspired to delay his statement until the last minute, after decisions had been made. (Note to selves: the FICSA President's 29 June 2015 letter is still apparently unwelcome on the AFICS website). FICSA had supported the request for an updated MOU, he noted, on condition that the rights of current and future Fund staff were protected. In order to know “what went wrong, where, and at what stage” Mr. Fitzgerald wished to see “all draft versions of the MOU” plus he needed to hear from not only the Legal Adviser on behalf of the CEO, but also from the RSG and OHRM. 

FICSA President at Pension Board: Call for more transparent Fund management, and questions about MOU and rights of staff (29 July 2015)

CCISUA message at UN Pension Board meeting: Bring the Fund management back in line and restore trust in staff management relations! (29 July 2015)

Mr. Chairman, Pension Board members and observers,

I would like to thank you for this opportunity to speak on behalf of more than 60,000 active participants of the Fund, who are represented by the Coordinating Committee of International Staff Unions and Associations (CCISUA). Included in those 60,000 are the staff of the Pension Fund working in New York and Geneva as well as staff representatives of the Fund in New York who have in the course of their daily work, been cooperating with OIOS audits on various issues including Human Resources issues, and have raised concerns with management’s proposed changes to rules and policies on fraud reporting, and financial management.

Taking into account the number of constituents I represent, it seems quite inappropriate, the heated discussion in the Board about CCISUA's right to replace its observer when needed. Such replacements have been made in the past, and given the argumentation presented by the Fund secretariat, that the nominated observer could be the CCISUA president, but not the CCISUA adviser who happens to be a  staff representative of the Fund in New York, it may be construed that this could just be  a  retaliation exercise taking place under the cover of those formal considerations.

Saturday, July 25, 2015

Pension matters: the week in review, and the pause that refreshes (25 July 2015)

It's perhaps time for a quick update on last week's events.

Website transparency: You may recall that more than a week ago, on 18 July 2015, 77 AFICS members signed their names to a letter requesting the AFICS President and Governing Board to post on the AFICS website, “in the interest of fairness, transparency and accountability” our letters connected to those of the AFICS leadership, posted on the website, concerning a request under the AFICS By-laws for a meeting to be convened on pension matters.

We also asked for the FICSA President’s letter of 29 June 2015 calling for no new MOU and strict limits on investments by the Pension Fund in hedge funds (posted below).

As of today, the AFICS leadership apparently remains unmoved. These letters are nowhere to be found on the website. Consequently, the lopsided and distorted view of the pension controversy offered by the AFICS website continues,

Friday, July 24, 2015

Message to the UN Pension Board: protect the health and safety of our Pension Fund! (23 July 2015)

23 July 2015

Members of the Joint Staff Pension Board, 

We have the honour to present to you below a petition signed by more than 3,176 participants and beneficiaries of the United Nations Joint Staff Pension Fund, requesting that you maintain in place the current system of checks and balances that has allowed the Fund to thrive over the past 65 years when many public pension funds have failed. 

This petition follows a previous petition in May 2014 initiated by the United Nations Office in Geneva, which was signed by more than 13,000 Fund participants and beneficiaries. 

We are aware that the Pension Board requested a review of, and adjustments as needed, to the Memorandum of Understanding (MOU) between the Fund Secretariat and the Office of Human Resources Management that provides for certain administrative flexibilities to the Chief Executive Officer in human resources management, including recruitment, retention, mobility, and classification of posts. 

Message to FAFICS: Honor the signers of the petition; protect our Pension Fund! (23 July 2015)


23 July 2015

Please find attached the Avaaz Petition addressed to the Secretary-General with 3,176 signatures as of 23 July 2015. The text of the petition and our covering letter to the SG is below. Please note the wide range of people and countries that are represented among the petition signers. We strongly urge that FAFICS officers and leadership honor the people who have signed this petition by taking their concerns seriously and acting accordingly.

Attachments (all available on UN Pension Blog): 
Petition signers as of 23 July 2015
Petition text per Avaaz

Letter to the United Nations Secretary-General, dated 21 July 2015

Wednesday, July 22, 2015

MOU - the details are underwater! (22 July 2015)

(By Matthew Chip Bhima Hogan)

CEO pole vault! (22 July 2015)

(By Matthew Chip Bhima Hogan)

Pension matters: A call to recommit ourselves to our shared purpose (22 July 2015)

It is a sad truth that when we share a common purpose, yet lose sight of the whole, we forget where we are heading, and cause others, and ourselves, unnecessary pain. That is a pity for all involved --  and a pity for our shared cause. 

Regarding the controversy yesterday surrounding the draft resolution sent to the Pension Board, differences of views hinged more on form than on substance. 

There was a single –- although significant -- divergence between this draft and the revised compromise draft which four members of the working group, myself included, were about to submit to the group when the discussions broke down last month. This essential difference related to the amount of emphasis to accord to the four staff management exceptions in the draft MOU (see Lowell Flanders' explanation of our views, which does not need to be repeated here).

Tuesday, July 21, 2015

Thank you, UN Retiree, Donald J. Rogers (age 83) for your kind message about our letter to the SG (21 July 2015)

Tuesday, 21 July 2015

Dear Loraine,

I know from past experience that letters of this magnitude and detail do not just appear overnight.  A lot of hard work, long hours of drafting and redrafting, stress and strain go into obtaining the final text as presented.

I personally think it reflects exactly the message we all want to get across to the Secretary-General and the administration in all of its aspects.  I trust others think likewise.

May I offer all of you my sincere personal congratulations on a job extremely well done.

You may use this letter as you see fit if you think it will help the cause towards a satisfactory resolution of this long ongoing and somewhat painful saga.

Donald J. Rogers(Age 83)

Pension matters: Petition signed by 3000 plus delivered to the Office of the Chef de Cabinet today! (21 July 2015)

Petition signed by 3000 plus delivered today, 21 July 2015, to Mr. Patrick Carey 
Director, Office of the Chef de Cabinet, Executive Office of the Secretary-General.
In the photo (L to R): Loraine Rickard-Martin, Patrick Carey, 
Anna Theofilopoulou, Curling Smith, Lowell Flanders

Cover letter below



Excellency Ban Ki-moon

21 July 2015


We have the honour to present to you a petition signed by more than 3000 participants and beneficiaries of the United Nations Joint Staff Pension Fund, requesting that you maintain in place the current system of checks and balances that has allowed the Fund to thrive over the past 65 years when many public pension funds have failed.

This petition follows a previous petition in May 2014 initiated by the United Nations Office in Geneva, which was signed by more than 13,000 Fund participants and beneficiaries.