Friday, July 15, 2016

Fund in crisis: Just the facts, please! Act now to protect our Fund, sign the petition, 15 July 2016

The annual Pension Board meeting started yesterday, 14 July 2016, in Vienna. There’s no time to lose to act to counter the well-oiled political machine that’s intent on taking our Fund in increasingly risky directions, and seemingly willing to do whatever it takes to achieve its objectives.

As a single example, consider the CEO’s message posted on the Fund website yesterday

 It has become routine over the last few years that different groups, and specifically UN Staff Unions, lobby the Pension Fund Board before and during its annual meeting. Often the statements, which are widely circulated, create anxiety. Regardless of the information that you may hear, the facts, as being presented to the Board, are that the financial health of the Fund is solid, indeed it is expected that the latest actuarial valuation results will show a positive trend.” (link below)

Pause to consider this phrase: “Regardless of the information you may hear.” From any source besides the CEO's machine?  The facts are that the most intense lobbying of the Board comes from both the CEO and the RSG and what the Board is hearing, isn't necessarily factual.

The fact is that there’s a crisis of management and crisis of confidence in the Fund Secretariat under the current CEO, which is unprecedented in the 67 year history of the Fund. 

Another fact is that on the other side of the Fund, the Investment Management Division under the RSG, investment performance is alarmingly low in an environment which the Assets and Liabilities Monitoring Committee described in two letters to the Secretary-General as “weakened investment governance and risk management” and “in violation of investment policy” (letters dated 11 February and 7 March 2016). 

If you haven't already done so, the most recent expert investment analysis , available on the CCISUA website (link below) is a must read. Here are some of its conclusions: 

·    Investment performance was well below the benchmark in the North American and Fixed income portfolios, and it got worse in 2016.
·    Increased outsourcing of investments in the Fund's North American and emerging markets portfolios.
·     Investments in arms and tobacco.
·     Poor risk management.
·     Persistent vacancies in key posts.
Another  important fact: new revised financial rules state: under ‘Investments of the Assets of the Fund (link below):

“D.13 Fees, commissions, or other similar amounts paid by the Fund on the authorization of the RSG to brokers or dealers in securities, to discretionary investment advisers or managers, or otherwise incurred on the authorization of the RSG in connection with a transaction carried out for the investment of the Assets of the Fund shall not constitute expenditures of the Assets of the Fund within the meaning of Financial Rules C.1 to C.3. Rather, such amounts shall be regarded as constituting transactional costs relating to the investment of the Assets of the Fund and shall be accounted for by the RSG, in accordance with Article 19(b) of the Fund’s Regulations, as elements of transactions regarding the investment of the Assets of the Fund.” 

Now,  yet again, in an email sent to all AFICS members yesterday, the AFICS/FAFICS President jumped into the fray to assist the CEO (MOU redux) enjoining its world-wide membership of UN retirees not to sign the UN staff unions petition to the Secretary-General to protect the health of our Fund. Quote: “If this narrative sounds familiar, it is because it is a repeat of the one already used last year in the campaign by staff representatives against the Memorandum of Understanding (MoU).” This from a leadership who’s squandered any credibility it ever had with its leaked email to OIOS dated 1 June 2016, running interference for the CEO in an attempt to block the audit. This from a leadership who has twice in the past two years refused to convene consultations as requested by its members under AFICS bylaws.

This is a crucial time for our Fund. Self-interested narratives are fielded with a single purpose: to wield power and influence and distract us from our purpose: protecting our retirement savings and those of generations of UN staff to come. Now is the time to laser in on just the facts: the fact that our Fund is experiencing an unprecedented management crisis; the fact of historically low investment returns and poor oversight on the investment side; the fact of a push toward more power concentrated in the hands of those who are intent on taking our Fund in the wrong direction. And the fact of all of this occurring in an environment of non-existent whistle blower protection in the UN, giving impunity to those who push the limits of their self-interest. 

The continuing health of our retirement savings is at stake and we have no time to lose. If you haven’t done so already, please sign the petition now! (As of now, there are almost 11,000 signatures).


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