Tuesday, July 19, 2016

Pension matters: Inconvenient truths, image and reality, 19 July 2016

As fast as the Fund leadership’s public relations apparatus scrambles to plug the holes in the narrative, they keep popping up in the most inconvenient places. The phenomenon recalls a very effective booklet the UN published a few decades ago, titled “Image and Reality”, a valiant effort to replace myths about the UN with factual and verifiable information.
Offered here are some of the public relations “images” that are so strenuously perpetrated, and for each, its concomitant reality check. Recall that this 'truthiness gap' is the backdrop against which our Fund leadership is pushing for ever more power over staff management, procurement, and outsourcing of investments and fees paid to external managers. (Please sign the petition to protect our fund if you haven't already done so).
Backlog in delayed payments
Image:  the backlog in delayed payments to new retirees and survivors is 97 per cent eliminated.
Reality: ISeek message dated 14 July 2016:
“Excerpt: The UN’s Management has requested the Fund to be provided [through the audit initiated in May?] with comprehensive information on all outstanding cases. The Fund has reported the following actionable cases as being still pending processing as of 30 June 2016:
. 1,688 retirement and initial separation cases; and
. 900 (approximately) special cases (such as survivor benefits, child benefits)
The Fund also indicated that they have a large number of deferments (by choice) and recalculation cases as well as cases recorded in their system for which documentation is missing. In this respect the UN’s Management has also requested the Fund to proactively assist member organizations and separated staff by following up on individual cases in order to help expedite (re)submission of missing documentation. . ."
Question: Do the 1,688 ‘retirement and initial separation cases'; and 900 ‘special cases’ and ‘deferments’ and cases for which ‘documentation is missing’ and must be ‘re-submitted’ constitute the old backlog? Or is this a new backlog?

Fund's state of health (sustainability)
Image: (Quote from the Fund’s Senior Communications Officer, Lee Woodyear, today on FCUNS under post title: “UNJSPBoard 2
Day Four, 63rd United Nations Joint Staff Pension Board”:
“Despite recent non-Fund communications to the contrary, the Fund continues to be in a well-funded position as certified by the Fund’s Consulting Actuary and further ratified by the Committee of Actuaries.”
Reality: The Assets and Liabilities Monitoring Committee's Third report, published on FCUNS today lists among its findings (see separate blog post today titled "Pension Fund exposed to significant governance, investment, operational and compliance risks" for the Committee's Power Point presentation (screen shots of the slides):
Quote: “The Committee is concerned by decline in investment performance over the last two years.
å The Fund’s investment return declined significantly since end of 2014 and has been below the policy benchmark.
å Given the critical importance of the investments, a failure to meet benchmarks on a continued basis will threaten sustainability of the Fund.
å The ALM Committee believes that it is imperative to have an analysis of the reasons for the underperformance of the Fund’s investments against the policy benchmarks since the end of
Question: Are participants and beneficiaries to discount the serious concerns of the Pension Board’s Assets and Liabilities Monitoring Committee, despite the fact that other analyses have arrived at the same conclusions as the ALM Committee, because there’s an actuarial report that says it’s all fine? Does the right hand ever communicate with the left?

Allegations of mismanagement fraud against the CEO brought by Fund staff
FCUNS Facebook exchange yesterday under post by Ian Richards titled “Why you should be concerned about how the UN pension fund invests your money” (see screen shot, click on it for enhanced visibility)
Image: comments by the Fund's Senior Communications Officer, Lee Woodyear
Reality: comments by Ian Richards and Curling Smith
Question: What's the hold up with sharing the links to the alleged audit reports? Stay tuned.

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