Friday, September 29, 2017

Bloomberg: UN Pension Fund Starts Search For New Management, 29 September 2017

UN's $61 Billion Pension Fund Starts Search for New Management

  • September 29, 2017, 4:00 AM EDT
  • ‘Trump bump’ in market may have come too late to save managers
  • Fund makes payments in 15 currencies to UN retirees worldwide
The UN Joint Staff Pension Fund is seeking candidates with “more than 20 years of proven progressively responsible experience” to replace Carolyn Boykin, the former chief investment officer of the Maryland State Retirement and Pension System, who took the UN post three years ago, according to an internal job posting seen by Bloomberg News.
Whoever replaces Boykin won’t be taking a typical investment post. The UN fund is among the world’s most complex, with more than 128,000 participants and 72,000 retirees in nearly 200 countries. Its payments go out in 15 currencies, including dollars, euros, kroners and rupees.
While the fund is up about 12 percent this year through August -- in line with the S&P 500’s return -- to a record $61 billion, that gain from the “Trump bump” in markets has come too late. At the famously byzantine UN, the posting of Boykin’s job is an unusual sign of disapproval from Guterres, who took office in January and oversees the pension fund’s investment director.
“Officially her post was advertised, but that’s UN for firing,” said Ian Richards, a critic of Boykin who serves as president of the Coordinating Committee for International Staff Unions and Associations of the UN system, the employee labor union, which has more than 60,000 members.

‘Competitive Process’

Calls to Boykin’s office seeking comment were directed to the secretary-general’s office.
“She is aware that nominations for her post have been opened,” said Farhan Haq, deputy spokesman for the secretary-general. “The position was advertised widely and will be filled through a competitive evaluation process.”
The decision to seek new leadership comes after the fund had an inflation-adjusted return of 3.1 percent last year, missing its own target by 0.4 percentage points. That miss wasn’t a one-off. The pension fund also missed its target by 5.2 percentage points in 2015 and by 1 percentage point the year before.
Boykin isn’t the only manager who has faced criticism. Sergio Arvizu, the fund’s chief executive officer who oversees benefits and operations, came under fire after new benefits-management software installed in 2015 led to delays in making payments to beneficiaries. Thousands of new retirees, some of whom had to wait six months to receive payments, were enraged.
Matters came to a head last December, when the General Assembly passed a resolution criticizing the fund’s returns and for the delays in making payments. The resolution expressed concern that, for the 2014–2015 period, the fund had “losses” of $3.4 billion in foreign exchange transactions.

Audit Conducted

The resolution also called on the UN Office of Internal Oversight Services to conduct comprehensive audits of the fund’s policies and report on Boykin’s performance.
The subsequent audit criticized management for not developing plans on how to eliminate delays and expedite hiring for long-vacant positions. The report also urged steps to ensure that delays and “very low response” rates to emails and telephone calls from clients be addressed.
Boykin, who was previously president of Bolton Partners Investment Consulting Group, is part of a complex governance structure at the UN fund. While Boykin reports directly to Guterres, Arvizu oversees benefits and operations and reports directly to the UN General Assembly, the main body representing all 193 member countries. The investment committee includes representatives from China, Germany, Iraq, Botswana, Spain, Brazil and the U.S.
Arvizu, a former director of investments at Mexico’s Social Security Institute, has also been a target of the UN’s labor union over efforts to change management policies at the fund. In a 2015 letter to members, Arvizu said he was facing a “malicious campaign with gross misrepresentations.” The allegations triggered an internal investigation by the UN’s anti-corruption watchdog, which cleared Arvizu.
The latest General Assembly resolution also had an impact on Arvizu’s contract negotiations. He already had served one five-year term and was eligible for a second five-year term starting in 2018. But the pension board renewed his contract for three years instead.
“The consensus was for a three-year extension,” Lee Woodyear, a spokesman for Arvizu, said in a phone interview. “There were some compromises.”

Monday, September 25, 2017

UN Pension Fund: Selection of the RSG for Investments: Open letter to the USG for Management, 25 September 2017

Open letter to Ms. Jan Beagle, United Nations Under-Secretary-General for Management

25 September 2017

Dear Ms. Beagle,

Subject: Selection for the post of Representative of the Secretary-General for Investments

In view of the current selection process for the Fund’s Representative of the Secretary-General for Investments (RSG), it is imperative that you ensure that the selection committee bears the following pertinent information in mind.

As you are aware, investment underperformance – failure to meet the policy benchmark – puts the long-term sustainability of the Fund at risk and is a matter of ongoing concern.  

The issues are documented in the reports of UN governing bodies and include General Assembly resolution 71/625, reports of the Advisory Committee on Administrative and Budgetary Questions (A/72/621), the Board of Auditors for the past two years (A/71/5.Add.16 and A/72/5.Add.16) and the report of the 63rd Pension Board meeting (A/71/9).  In fact, this matter has been of such concern that the Pension Board this year engaged Deloitte Touche to perform an independent third-party review of investments.

Sunday, September 17, 2017

UN Pension Fund - Silencing Dissent Amid a Possible Move to Change the Fund's Plan, 17 September 2017

The Chair of the Pension Board (Annick Van Houtte, FAO) is incensed about transparency. In her view, there’s too much of it. She’s so determined to silence the UN Participant Representatives that she’s requested the UN Administration to deny the UN Staff Associations access to the UN IT system. (See her letters of 26 July, 10 August and 13 September 2017, below. All correspondence mentioned in this article are contained here or are available on the pension blog).

Transparency – a clear and present danger. In the Chair’s view, by informing the owners of the Fund, participants and beneficiaries of what’s going on with our Fund, UN Participant Representatives are a clear and present danger. In her 13 September 2017 letter, she dismisses their letter to the SG (28 August 2017) as partial, incorrect, misleading, flawed, deceptive, irresponsible, unbalanced, damaging to the reputation of the UN and the Pension Board, jeopardizing the effectiveness, efficiency and credibility of the Fund, and weakening the governance mechanism. She further challenges the UN Participant Representatives concerning allegations of managerial deficiencies on the part of the CEO to “prove it (“he who asserts must prove.”)

Allegations borne out by UN governing bodies: The Board Chair ignores a salient fact, which is that one by one, allegations about managerial deficiencies at the Fund have been borne out over time in the reports of UN governing bodies, including GA resolution (71/265), ACABQ report (A/71/621), Board of Auditors report (A/72/5.Add.16), and OIOS audit (2017/02).

Management accountability:  Following the recent Board session in Vienna (24 to 28 July 2017) which recommended a final reduced three-year term for the Fund’s Chief Executive Officer, the UN Participant Representatives note in in a 28 August 2017 letter to the Secretary-General that under paragraph F.1 of the Fund’s regulations, the decision to reappoint the CEO is his alone. They draw his attention to documented managerial deficiencies and ask that in making his decision on reappointment, he set a strong example of is new policy on management accountability.

The Board Chair’s various grievances as stated in her 13 September 2017 letter, can be summed up as follow: UN Participant Representatives as members of the Board are accountable solely to the Board; no group or faction of a group is allowed to issue its own statements (para. 4); they were part of the decision-making and consensus on the CEO’s reappointment and must not discredit it (para. 6); the Secretary-General has no “discretionary authority” over reappointment of the CEO – he merely performs administrative actions related to the Board’s recommendation (para. 7); the case of the elected UN Participant Representatives barred from the Board is ongoing in the Tribunal and cannot be discussed (para.9); there’s no proof of poor performance by the CEO. (para. 10); UN Participant Representatives don’t represent retirees as confirmed by the FAFICS president (para. 10; see email from FAFICS president to the Chef de Cabinet); and the Board’s work and its documentation are private (para. 5).

Misguided and plain wrong. The Board Chair is misguided, and plain wrong, on several counts. As the UN Participant representatives point out in their response (15 September 2017), she has no locus in commenting on their letter to the SG, which is an internal UN communication.  While she suggests that the interest of the Fund and that of the Board are equivalent, as Participant Representative, they are accountable to the staff who elect them and “see the interest of the pension fund from that perspective”.  As for representing the interests of retires, may retirees have indeed reached out to the UN Staff Associations “after failing to obtain satisfactory support from other avenues”.  Finally, the UN Participant Representatives note, given that two of their members have been excluded from the Board “it is technically incorrect to assert that members of the UN SPC should be individually bound by consensus”.

In addition, one may add to the UN Participant Representatives’ refutations, that as far as no group being allowed to issue its own statement, FAFICS circulated by email on 9 August 2017 a lengthy statement about the Board meeting to its members. As the lawyer for the two elected UN participants stated to the Board Chair in his letter dated  17 August 2017, the statement she made about the status of the case in her letter to the UN Administration of 10 August  was incorrect.  The FAFICS president has consistently dismissed the concerns of retirees and tried to block the OIOS audit of payment delays and many retirees have turned to the UN Staff Associations to protect our interests. Further, much of the proof the Board Chair demands concerning poor performance of the CEO is detailed in the 40-page report of the OIOS audit (OIOS/02), if she would only read it.

The current situation

Push to reappoint the CEO. The Board Chair, FAFICS and other CEO supporters, remain determined to shove through a three-year term for the CEO (albeit a final term with special oversight measures), to feather his nest, and in the process shut down dissenting voices while thousands of suffering orphans, widows, and retirees, remain unpaid.

Representative of the Secretary-General (RSG): The RSG has overseen chronic investment underperformance since she came on board in 2014 which places the long-term sustainability of the Fund at risk. Managerial deficiencies on her watch are documented in the above-mentioned reports of UN governing bodies. The Board engaged Deloitte Touche to conduct an independent third-party review of investments, and her post was advertised in July. Her contract, due to end this month, is now reported to have been extended to the end of December and she’s announced all along that despite her post being advertised, she’s “going nowhere”.

Concerns about changing the current pension model? The CEO’s rambling discourse at the AFICS/NY annual assembly on 27 June 2017 on the number of major companies and organizations, including the World Bank that have changed their pension systems from defined benefit (where the employers bears all risks) to defined contribution (where the employee bears all risks) continues to cause concern among participants and beneficiaries of the Fund. Why, many wondered, would he spend a significant portion of his presentation on this topic without a motive?

Shortly thereafter, the UN Participant Representatives raised the issue in a 10 July 2017 Broadcast to all Staff  which was swiftly met with a rejoinder from the former Board Chair in a letter dated 12 July 2017, (quote): “. . . the UNJSPF has been established by the   United Nations General Assembly (UN GA) as a defined-benefit pension plan and this question is not discussable. This is also very clear from the UNJSPF Regulations and Rules. There is no threat or challenge to this status and to raise the possibility of a change in this status with staff is to cause unnecessary concern.”

UN leadership considering the issue? So what is behind the current accounts from reliable sources in the Secretariat that the issue is receiving strong support from the Fund management and some of the UN leadership?  It’s conceivable the Fund's leadership may be seeking allies among certain Member States as a way to save their jobs. Consider, as one possible example, Nikki Haley’s South Carolina hasn’t done so well on pensions – see link below.

Who can we trust? It’s a common tactic to accuse dissenting voices of subversion, as the Board Chair does in her letters to the UN Administration and the UN Participant Representatives.  She fails to grasp that the UN Staff Association representatives, and current elected UN Participant Representatives, have proved their reliability and trustworthiness to participants and beneficiaries. That is not the case with the Fund Management, the FAFICS President, or in some cases the Board leadership, for that matter.

At the same AFICS/NY assembly where the CEO engaged in his rambling discourse, the Chef de Cabinet demonstrated by her statement that she understood the extent of the problems facing the Fund. At a Town Hall meeting shortly therefore, the Secretary-General stated publicly his determination to protect the pension benefits of UN staff.

The General Assembly in its resolution and its Advisory Committee on Administrative and Budgetary Questions (ACABQ) in its report have demonstrated that the eyes and ears of their representatives are open and that they are responsive to the problems besetting our Fund. There’s reason to believe that this is still the case.

Along with the valiant efforts of the UN Staff Associations, and for the sake of our Fund’s continued health, we’re placing our hopes on action by those committed to protecting our Fund for past, current and future generations of UN staff.

List of communications contained below:
1.     Communication to the Pension Board Chair from UN Participant Representatives regarding the Pension Fund, 15 September 2017
2.     Memorandum to UN Participant Representatives from the Pension Board Chair, 13 September 2017
3.     Email to the Chef de Cabinet from the AFICS President, 29 August 2017
4.     Letter to the Secretary-General from UN Participant Representatives, 28 August 2017
5.     Letter from George Irving, Esq. to the Pension Board Chair, 17 August 2017
6.     Letter to the UN Administration from Pension Board Chair, 10 August 2017
7.     UN HQ Broadcast from UN Participant Representatives, 2 August 2017
8.     Communication to the UN Administration from Pension Board Chair, 26 July 2017
9.     UN HQ Broadcast: Staff Union Information Session on the UN Pension Fund, 27 July 2017

10. UN HQ Broadcast: Message from UN participant representatives to the Pension Fund, 10 July 2017  

1.         Communication to the Pension Board Chair from UN Participant Representatives regarding the Pension Fund, copy to Board Members
15 September 2017
Dear Annick,

Receipt is hereby acknowledged of your letter.

It is to be noted that this is the second time that you have chosen to comment about an internal communication within our organization (the UN). I trust that you will encourage other board members to share the internal communications in their respective agencies so that we can comment on those.

You appear to suggest that as board members we are accountable to the board and that the interest of the pension fund and that of the board are equivalent. However, as participant representatives, we are accountable to staff who elect us, and we see the interest of the pension fund from that perspective.

As to our drawing the attention of the executive head of our organization to various provisions in the fund's statutes and audit findings, to which his office is already privy via the organization representatives, there seems to be nothing incorrect.

You also question our claim that we have been representing the interests of retirees. I think you will find from our statements that this is indeed true. Many have reached out to us after failing to obtain satisfactory support from other avenues, and we have worked closely with the fund secretariat on individual cases of late payments.

Finally you will understand that with two members of the UN SPC excluded from the board, it is technically incorrect to assert that members of the UN SPC should be individually bound by consensus.

Kind regards,


Ian Richards
United Nations

2.         Memorandum to UN Participant Representatives from the Pension Board Chair

13 September 2017

Subject: Communications from UN participant representatives regarding the Pension Board

1.              I refer to our recent communications concerning the 64th the United Nations Joint Staff Pension Board (Pension Board or Board) session (Vienna, 24-28 July 2017), the first dated 3 August 2017, a message concerning the 07 Pension Board session sent to all UN staff members, and the second, your recent letter to the United Nations Secretary-General of 28 August 2017 concerning the Chief Executive Officer’s (CEO) re-appointment. Unfortunately, most of the information contained in these communications is incorrect, partial and/or misleading. I am concerned about the impact of such communications, as they do not correctly reflect the deliberations of the 64th session of the Pension Board, of which you are members (emphasis added). Indeed, such actions undermine the work and role of the Board, weaken the Fund’s governance mechanism and jeopardize its operational efficiency. I further noted that your communications were also published on social networks like Facebook.

2.              At the outset, I wish to recall that the Pension Board, which has a tri-partite membership (33 members), is a subsidiary organ of the United Nations General Assembly. Under article 4 of the Fund’s Regulations, the Board has the sole authority to administer the Fund. The United Nations Joint Staff Pension Fund (UNJSPF or the Pension Fund) is separate and independent from the United Nations Secretariat. As an inter-agency body, the Pension Board consists of members of the Staff Pension Committees (SPCs) of the 23 member organizations participating in the Fund. Any matters before the Board are normally discussed and agreed to in the respective SPCs or in the relevant constituent groups, prior to the deliberations in the plenary session of the Board.

3.              Indeed, it is the fiduciary duty of all Board members to participate actively and constructively in this process and to consult, discuss and cooperate with the other constituent groups of the Board, namely with the elected Participants’ representatives (11 members), the representatives of the Governing Bodies (11 members) and the Executive Heads nominated by the member organizations of the Fund (11 members), as well as with the four non-voting representatives of retirees. The Pension Board acts normally by consensus and its deliberations and decisions are included in its annual report to the UN General Assembly. That document is a public document.

4.              In accordance with article 14 of the UNJSPF Regulations and with the established practice, the Secretary of the Board/CEO, informs each member organization and – through his Annual Letter – participants ad beneficiaries of actions taken by the General Assembly regarding the report of the Pension Board.
Individual groups, or some factions of groups, do not issue their own statements.

5.              As was already communicated to you by Mr. Vladimir Yossifov, Chairman of the 63rd session of the Pension Board, in his email of 12 July 2017, as members of the United Nations Staff Pension Committee (UNSPC) and the Pension Board, you are part of the governance of the Pension Fund, the operations of which are governed exclusively by its self-contained Regulations promulgated by the General Assembly. The Rules of Procedure (C.11) provide that the meetings of the Board are held in private and the documentation is also kept private.

6.              You attended and participated in 64th Board session as elected representatives of the participants who are staff members of the United Nations. Along with the seven other participants’ representatives, you were part of the decision-making process with respect to all matters before the 64th session of the Board. Therefore, it is highly questionable and indeed inappropriate that you now try to disqualify and discredit the work and decisions of the Board, which were reached by consensus.[1]

7.              In particular, you were part of the consensus that decided on the extension of the term of reappointment of the CEO for 3 years; therefore, there is no basis for you to take now a different position in your communications. Keeping in mind that the Pension Board is the primary governing body of the Fund, has the sole authority to administer the Fund and reports to the United Nations General Assembly, the Board retains a specific authority over the appointment of the CEO, the Deputy CEO and the Consulting Actuary. In forwarding its recommendations to the Secretary-General it is merely requesting the latter to initiate the necessary administrative actions in order to implement its recommendation. In other words, the Pension Board is not requesting the Secretary-General to exercise discretionary authority on these matters. You may read more on the subject-matter in the ACABQ report to the General Assembly (A/65/567). Clearly, by forwarding its recommendation on the renewal of the appointment of the CEO of the Fund, the Board is communicating its decision on the subject-matter and it is not relinquishing its authority to administer and manage the Fund.

8.              Should you have any issues regarding the operation of the Board or its decisions, the proper forum for addressing them is a Board session. And in general, and with respect to the latest Board session operational or other aspects, you may use the United Nations Staff Pension Committee, which will next meet on 8 November 2017.

9.              As regards your public statement on the issue of the participation of the two staff members of the Fund’s secretariat in the 64th Board session, as you know, their participation was addressed by the Board’s Standing Committee (not by the CEO, as you allege) which concluded that, since there was a conflict of interest between their official function (as staff members of the UNJSPF secretariat) and them serving as members of the Pension Board (the Governing body of the Fund), they could not attend the Pension Board session or serve on the UNSPC (and hence on the Pension Board) until the conflict of interest has been resolved. By its orders 284 and 288 the UN Appeals Tribunal (UNAT) also rejected the respective requests from Mr. Faye and from Ms. Rockcliffe for interim measures to allow them to attend the Board’s 64th session. The matter remains under consideration by the Tribunal.

10.          Finally I noted in your communications a series of serious allegations of poor performance/unsatisfactory conduct on the part of the CEO which you have not supported with evidence. I am sure you are familiar with the principle that “he who asserts must prove”. In same vein, I wish to bring to your attention the email from the Chair of FAFICS dated 29 August 2017 asserting that “FAFICS is the sole entity recognized by the United Nations system to represent retirees in the Pension Board and other fora and must strongly reject the irresponsible and misleading statements made by the authors of the letter [to the Secretary-General dated 28 August 2017 […]”. (Email attached).

11.          To conclude, I wish to remind you of the Declaration of the Board members, which you have all signed. It states, inter alia, the following:

While performing these functions I shall exercise in all loyalty, discretion and conscience the functions entrusted to me and to discharge these functions and regulate my conduct with the interests of the Fund only in view.”

“I acknowledge and agree that, as a Pension Board member, I must maintain the confidentiality of all non-public information entrusted to me or otherwise obtained by me by reason of the discharge of my responsibilities as a Board member.”

12.          I thank you for your attention to this matter and trust that as participant representatives you will heed your obligation to act in the best interests of the Fund, refrain from issuing incorrect, partial and/or misleading information regarding the Pension Board 64th session deliberations or the operations of the Fund, and to adhere to the principles of confidentiality, professionalism and ethics which characterize the Pension Board sessions.

c.c.       Bureau of the 64h Pension Board, Chair of the 201st Standing Committee and Fund Secretariat: Mr. B. Fitzgerald, Ms. P. Poroli, Ms. L. Saputelli, Mr. V. Yossifov, Mr. S. Arvizu, Mr. P. Dooley, Ms. J. Sareva, Ms. D. Mapondera, Mr. L. Woodyear

3.         Email to the Chef de Cabinet from the President of FAFICS, copy Board Chair and FAFICS

From: Linda Saputelli
Sent: Tuesday, August 29, 2017 10:22 PM

To: Maria Luiza Viotti

Subject: Letter dated 28 August to Secretary-General from UN Staff Representatives

Dear Maria Luiza,
A recent letter to the Secretary-General dated 28 August 2017 from six United Nations staff representatives, four of whom serve on the Pension Board, has come to our attention.

I am writing on behalf of the FAFICS representatives to the Pension Board and its 60 AFICS member associations world-wide. FAFICS finds this letter, replete as it is with the repetition of unproved past allegations and misrepresentation, most surprising as the four representatives were part of the consensus in the Pension Board which agreed to a three-year extension of the CEO.

Since the letter also asserts “widespread criticism” of the CEO by “retirees”, we wish to recall and stress in particular that any retirees referred to in the letter have no standing whatsoever within the United Nations, its funds and programmes, and specialized agencies. FAFICS is the sole entity recognized by the United Nations system to represent retirees in the Pension Board and other fora and must strongly
reject the irresponsible and misleading statements made by the authors of the letter who are now attempting after the fact to disassociate themselves from a consensus in which they fully participated.

We feel confident that the Secretary-General will support the recommendation of the Pension Board for a three-year extension of the CEO in this critical matter and would request that you kindly bring this message to his attention.

Warren Sach and I would like to meet with you in the latter half of September and would ask that you indicate a time and date that would be convenient.

With many thanks for your cooperation.
Warm regards,
Linda Saputelli

4.         Letter to the Secretary-General from UN Participant Representatives, copy Members of the Board

28 August 2017

Dear Secretary-General,

Since coming to office you have affirmed to staff on a number of occasions your belief in enforcing a system of management accountability in the United Nations and in the senior level appointments that you make.

You will shortly be asked to reappoint the current CEO of the pension fund, Sergio Arvizu, for three years.

To this end we would like to draw your attention to paragraph F.1 of the Fund’s regulations, which states:

            “The Chief Executive Officer (CEO) and the Deputy Chief Executive Officer (DCEO) shall be appointed by the Secretary-General on the recommendation by the Board for a maximum term of five years each and may be reappointed once.”

It is therefore important to emphasize that the decision to reappoint the CEO will be yours alone.

            In considering what decision to take, we would like to draw your attention to the following facts:

The Board was heavily divided on what recommendation to make to you. The recommendation of three years with no possibility of reappointment was a last-minute compromise to avoid a divisive vote.

                  The CEO’s performance has attracted widespread criticism: from the Department of Management’s leadership, from UN staff unions and the three staff federations (CCISUA, FICSA and UNISERV), and from retirees.

            Criticism has included: a poorly implemented new IT system with no contingency planning, leaving retirees without income, many for more than nine months; attempts, since blocked by the General Assembly, to remove OIOS as the Fund’s auditor; attempts to remove the Fund from the UN’s administrative oversight by creating new staff and financial rules; attempts to circumvent rules on procurement and receiving gifts. It should be noted that the current payment backlog to widows, orphans and retirees still numbers in the thousands.

            For almost three years the CEO has refused to meet with staff representatives at the Fund despite multiple attempts by staff.

The CEO has misrepresented good faith and constructive efforts made by the UN’s Department of Management to resolve the situation involving two staff of the Fund’s Secretariat elected to the Board.

The CEO’s performance has been criticized in a spate of recent audits which raised among other things: non-cooperation by the Fund’s management with auditors; incorrect figures supplied to the actuaries resulting in an important actuarial report having to be dropped; and false information provided to iSeek on the size of the payment backlog.

In light of the above facts, the UN’s management and participant representatives, representing two-thirds of the Fund’s members, were against recommending any reappointment of the CEO. We were also guided by the knowledge that Fund has enough qualified staff to assume interim leadership.

We hope that in view of your support for management accountability and in order to set a strong example of this new policy early in your term, that you will decide to take a similar position.

Thank you for your consideration of this matter.

5.         Letter to the Pension Board Chair from George Irving, Esq. (subject her letter to the UN Administration dated 10 August 2017 posted on FCUNS)

From: George Irving
Sent: Thursday, 17 August, 2017 11:35 AM
To: Annick VanHoutte

Subject: Your letter to the UN Administration

Dear Ms, Van Houtte,

I have recently read you letter of 10 August 2017 in connection with the meeting of the Pension Board. In it you make reference to the recent UN Tribunal case brought by Ms. Rockliffe. I am her legal counsel and wish to advise you that your characterization of the outcome of her request for interim measures is inaccurate.

The Appeals Tribunal did reject the motion but did so on the grounds that the Tribunal's Statute did not provide for interim measures in the case of appeals from decisions of the Standing Committee of the UN Pension Board. It made no findings on the merits of the appeal, which has not yet been adjudicated.

Your statement that the Appeals Tribunal upheld the decision of the Standing Committee is therefore inaccurate and misleading. I would appreciate if you could therefore correct this information and advise those who have been copied on your letter.

George G. Irving

6.         Letter to the UN Administration from Annick Van Houtte, Chair of the 64th UNJS Pension Board regarding UN Broadcast message from the UN Staff Associations of 2 August 2017

“What happened at this year's meeting of the Pension Fund Board”

10 August 2017

To: United Nations Administration

Further to my email to Mr. Victor Kisob dated 26 July 2017, copied below for easy reference, I wish to express my serious concern with the irresponsible communication below from UN Staff Associations concerning Pension Board matters, "A Message from the UN Staff Associations: What happened at this year's meeting of the Pension Fund Board - Ce qui s'est déroulé à la réunion annuelle du Conseil d'Administration de la Caisse des Pensions", disseminated using UN IT infrastructure and systems. After its wide broadcast within the UN, this communication has now also already been propagated through social media. It clearly damages the reputation of the United Nations, the Pension Board and the Fund; it jeopardizes the operational effectiveness of the Fund; and weakens the Fund's long-standing governance mechanism.

Regarding the operational aspects of the Fund, for example, under the heading "negative audit reports", the broadcast presents misleading, partial and incorrect information. Indeed, the Audit Committee in its report to the Pension Board (JSPB/64/R.25 attached for ease of reference) acknowledged the Fund's progress in many areas within its purview, and presented an objective,
balanced and fair assessment of progress made as well as opportunities for improvement. Progress was noted in respect of the filling of senior level vacancies, the important reduction in the inventory of actionable cases, the measures taken to improve client services; and greater clarity in developing the IMD ICT strategy. Additionally, the Committee (and accordingly the Board members) was pleased to note that the long-standing goal of having the final report of the Board of Auditors (BOA) presented to the Pension Board has been fulfilled at the recent Board Session in Vienna. It was also pleased to learn that the BOA expected to issue an unqualified
audit opinion on the Fund's Financial Statements for the year ended 31 December 2016, and that the Fund's Statement of Internal Control for 2016 was supported by independent assessment and testing of the internal controls over financial reporting. On the other hand, the Audit Committee expressed concerns about the deteriorating working relationship between the Fund's management (both secretariat and IMD) and the internal audit service, the need for improvement with respect to the IMD's strategy for ICT, and concerning reporting on the universe of its actual workflows and potential caseload.

You will appreciate, that it is misleading and incorrect to portray the audit results as "negative audit reports" and as "damming" when important progress has been acknowledged by the Pension Board and its Audit Committee and when considering that the Fund is receiving an unqualified "clean" audit opinion.

Under the same heading, there is also an unsubstantiated allegation of "false information" being provided by the Fund, which needlessly may alarm the Fund's participants and beneficiaries who will flood the Fund's client services with queries related to the misleading broadcast, preventing the Fund from opportunely answering "true" queries or service needs.

The UN Staff Unions' communication contains also misleading, inflammatory and incorrect information on the outcome of the recent Board session which took place in Vienna, hence undermining its role and work.

To illustrate the foregoing, under the heading "budget", the broadcast advances a flawed and deceptive notion that the increase in the budget requested by the Fund secretariat and supported by the Board "will eat into the fund's future financial position". This is not only technically incorrect but also inflammatory. The total increase requested for the biennium represents only 0.0002 of the market value of assets as of 28 July 2017. The increase is immaterial for the Fund's
future financial position. As you know, the most critical economic variable for the Fund's future financial position is the investment return. To portray the requested increase as "eating into the fund's future financial position" is technically incorrect.

The broadcast labels the budget increase recommended by the Pension Board as "irresponsible". This allegation has no foundation. As you may know, in accordance with the decision made by the Board at its sixty-third session (A/71/9<>, para. 465), the Board established a Budget Working Group with representation of the Governing Bodies, Executive
Heads, Participants and FAFICS representatives. The Working Group carefully and thoroughly reviewed the budget request from IMD and the Fund secretariat. The Working Group met with the Fund's Chief Executive Officer and the Representative of the Secretary-General for the investment of the assets of the Fund, and with their staff to discuss and clarify the budget proposal in detail. Additionally, in its deliberations, the Working Group also took into account relevant comments made by the Audit Committee, the external and internal auditors, the
Investments Committee and the Assets and Liabilities Monitoring Committee.

After careful, thorough and objective analysis of the facts and needs, the Working Group reviewed the development of participants and beneficiaries in recent years in comparison to the resources in the Fund secretariat over the previous 5 biennia. It was concluded that the growth in workload of the Fund secretariat represented by the number of participants and beneficiaries, and
the number of benefits processed has grown substantially faster than the increase of Fund secretariat staff. This is a long-standing development. The maturing of the Fund has resulted in significant workload increase, as the effort required to process of pension benefits and ensuring the payroll for the beneficiaries is significantly higher than the administration of participants. The Working Group's aim in its recommendation was to maintain the capacity of the Fund secretariat to cope with this increasing workload in the short and medium term.

Also, as you know, the process involves extensive consultations, exchange of views and discussion within the different Groups and during the Board. The result of this extensive, detailed and diligent process is the decision by Pension Board to recommend a certain level of resources for a set of agreed objectives and benchmarks. It is the fiduciary duty of all Board  members to participate actively and constructively during this process. It is questionable for the Board members who also participated in the discussions and decision-making process of the Board to attempt to disqualify its work and decisions which were reached by consensus.
Another sample of misleading information can be found under the heading entitled "Attempts by the CEO to prevent elected board members from attending [the Board session]". The facts are as follows: On 8 June 2017 the UNJSPF Standing Committee decided to disallow two UNJSPF staff members to attend the 64th UNJSPF Board session because of conflicts of interest that arise in the course of carrying out their duties as UNJSPF staff members. This decision was based on a legal opinion prepared by the UN Office of the Legal Affairs, in November 1992 The existence of such a conflict of interest was addressed in the memorandum dated 6 November 1992 from the then Fund CEO, Mr. Raymond Gieri, to the then United Nations Legal Counsel, Mr. Carl August Fleischhauer, regarding a UNJSPF staff member who was standing for election to the UNSPC as a Participants' Representative. The then Legal Counsel confirmed that the situation as described by Mr. Gieri in his memorandum constituted a conflict of interest. Subsequent to the decision of the Standing Committee, both Mr. Faye and Ms. Rockcliffe, the elected Fund's staff members, filed separate appeals against the Standing Committee's decision to the United Nations Appeals Tribunal. In addition to the appeals, they filed requests for interim measures to allow them to be given access to documents and to attend the 64th Board session. Ms. Rockcliffe also filed a motion for her request for interim measures to be considered by a three-judge panel, which was granted under Order No. 287. By Order Nos. 284 and 288, respectively, the Tribunal dismissed both motions for interim measures rejecting their request to attend the Board session.
The Tribunal decided to uphold the decision of the Standing Committee specifying that its decision is without prejudice to any further consideration it may have in respect of the appeals.

The statement under the heading "Monitoring and follow-up" concerning the membership of the Audit Committee and the election of a Vice-Chair of the Standing Committee suggest a "victory"of the Participants Group. However, it should be noted that that Group, was entitled and, thus, expected to nominate a member of the Audit Committee and the Vice-Chair of the Standing Committee in accordance with the Terms of Reference of the Audit Committee and "Section B" of the Rules of Procedure of the UNJSPF. Such nominations are in line with the Pension Fund
rules and practice.

Finally, in the last paragraph, the signatories of the broadcast question the ability of the Board "to properly oversee [emphasis added] the ongoing operations of the complex fund..." because it only meets once a year for five days. Disqualifying the Board and its ability to properly carry-out its mandate of overseeing the Fund is inappropriate, if not highly irresponsible, and damages the reputation of the Board, weakening its role and responsibility. The statement also highlights either a lack of understanding of the complex governance structure of the Fund or a malicious intent, or possibly both.

As you know, the governance mechanism of the Fund is complex and multitiered. It has evolved over the years to adequately meet the Fund's needs and to properly oversee and guide the Fund. The UNJSPF is only one of a few defined benefit pension funds with a very solid financial position. The Fund also adequately operates on a truly global scale achieving high efficacy in disbursements (with levels of 99.2%).

The governance mechanism of the Fund includes the Board as the key governance body, but it is assisted in its work by the Audit Committee, the Committee of Actuaries, the Assets and Liabilities Monitoring (ALM) Committee, the Consulting Actuary, the Medical Consultant and other working groups that are created as required; for example, the Working Group on Sustainability that was created in 2012 to assist the Board with exploring possible measures to strengthen its long-term solvency. The recommendations of this Working Group, approved by
the Board and General Assembly, led to the adoption of important measures and the
strengthening of the Fund's actuarial position and governance mechanism.

Additionally, the Investment Committee also provides information and support to the Pension Board. All of these Committees have specific terms of reference and mandates and meet periodically and throughout the year to carry out their work. Many of these Committees also exchange information or hold joint sessions. Some of the Committee are composed by expert members only, such as the Committee of Actuaries and Investment Committee, and others are also assisted by expert, independent members, such as the Audit Committee and ALM Committee. In addition, as per Article 4 (a) of the Fund's Regulations, the Fund is administered
by the Board and a staff pension committee for each member organization, and a secretariat to the Board and to each such committee.

Therefore, the oversight and management of the Fund is much more complex and involved process than just a five-day meeting of the Pension Board. It is a thorough, multifaceted exercise carried out by many Committees with the support of independent experts, as well as the periodic work of 23 Staff Pension Committees and their secretariats. The results of a well-managed and overseen fund are evident as it has achieved an excellent financial and operational situation. To
disqualify and disseminate distrust in the Board's ability to properly oversee the operations of the Fund because of a lack of adequate understanding of its complex and professional governance process is harmful and irresponsible.

The foregoing samples show how unbalanced, incorrect and partial the communication of the UN Staff Association is. It is further unclear to me and concerning why the UN Administration decided to disseminate such a broadcast without prior consultation of the rapporteur of the 64th UNJSPF Board Session or myself. You will appreciate that disseminating incorrect and inflammatory information is not only unethical but also goes against the UN Staff Rules and the
Code of Conduct for International Civil Servants. They are "responsible for safeguarding the resources of United Nations organizations which are to be used for the purpose of delivering an organization's mandate and to advance the best interests of the organization." (paragraph 25)

Because disclosure of incorrect and misleading information may seriously jeopardize the efficiency and credibility of the Pension Fund and its Board, I should be grateful for your direct and prompt intervention to prevent the use of the UN IT infrastructure and systems in the future with a view to disseminating incorrect and misleading information about the Board 64th session or the operation of the Fund.

In light of the foregoing facts and considerations, I respectfully ask you to address this serious matter as soon as possible and request the issuance of a broadcast correcting the misinformation regarding the deliberations and decisions taken by the Board at its recent session. I am available  to contribute to the text of the broadcast and would, accordingly, very much appreciate you sharing the content of this broadcast with me before sending it out.

Thank you and kind regards,

Annick Van Houtte
Chair 64th Pension Board

7.         Communication to the UN Administration from the Annick Van Houtte, Chair of the Pension Board, on 26 July 2017

Dear Mr. Kisob,

I am highly concerned with the irresponsible communication below concerning an information session on pension matters, moderated by the President of the UN Staff Union, New York, and held in the UN premises.

As a Board member you know that any possible change to the Fund's plan design needs to be approved by the Pension Board and ratified by the General Assembly. As you also know there are NO items on the Board's Agenda that refer to any change in the plan design or move to a defined contribution scheme. Quite the contrary, the CEO in his presentation on the status of the Fund outlined all the measures taken over the past 10 years to strengthen the Fund. Both the CEO and the Committee of Actuaries also informed the Board of the healthy financial situation of the Fund.

As an HR manager you are fully aware that disseminating incorrect and malicious information is not only unethical but also goes against the Staff Rules. Therefore, I ask your direct and urgent intervention in order that the premises of the UN are not utilized to disseminate lies about the Pension Board or the Fund. Additionally, the infrastructure or other facilities of the Organization should not be used to disseminate incorrect information or outright lies.

Finally, I request that a broadcast be sent to correct the misinformation regarding of what is being discussed and decided by the Board.

Thank you and best regards,

Annick Van Houtte
Chair 64th Pension Board

8.         Broadcast UN HQ message from UN Participant Representatives

Sent: Wednesday, August 2, 2017 11:25 PM
To: OAH; DPKO; HQ_NY_Secretariat; UN_Funds_Programs_&_Tribunals
Subject: A Message from the UN Staff Associations: What happened at this year's meeting of
the Pension Fund Board - Ce qui s'est déroulé à la réunion annuelle du Conseil d'Administration
de la Caisse des Pensions

A Message from the UN Staff Associations

Dear Colleagues,

The annual meeting of the UN Pension Board has just concluded and we would like to inform you of the outcome. It is important to know that UN staff representatives numbered 4 of the 33 board members. In addition, a statement by the staff federations is attached.

Negative audit reports: The Board considered a number of audit reports from OIOS and the Board of Auditors. Some were quite damning, raising among other things non-cooperation by the Fund’s management with auditors, incorrect figures supplied to the actuaries resulting in the actuarial report having to be dropped, and false information provided to UN staff on the size of the payment backlog.

Extension of the CEO: In view of the above, and taking into account the serious payment backlog, lack of contingency planning and poor staff-management relations at the fund, we worked with others on the Board for the non-renewal of CEO Sergio Arvizu for another five years. The reduction to three years of the second term, with no possibility of renewal, installation of special oversight measures, a search committee to find a successor and a limit on the CEO’s ability to start new projects without Board approval, is the result of a long and difficult session. It
nevertheless sends a strong signal. However, the Board’s decision on renewal is only a recommendation to the Secretary-General who alone must make the final decision.

Budget: The Board approved a large increase in the budget of the Fund’s secretariat, with new posts mainly at the top levels. We made clear our reservations about a budget increase we found to be irresponsible, especially as these posts are paid for by you and will eat into the fund’s future financial position. This will now be decided by the General Assembly in the fall.

Long-term sustainability: the Fund faces an environment in which lower investment returns and a growing budget are paired with an increasing ratio of beneficiaries to contributors and an increasing ratio of non-staff to staff. This fundamental issue was not discussed even though we consider it the most important challenge for the fund right now. We hope to get this on next year's agenda.

Attempts by the CEO to prevent elected board members from attending: Two staff
representatives from the UN were prevented from attending the Board despite 4,600 of you signing a petition. The CEO cited conflict of interest. We are not convinced. Nor did the Secretary-General appear to be in last week’s town hall meeting. The matter is currently at the UN Appeals Tribunal.

Monitoring and follow-up: In order to contribute to the monitoring and follow-up of the Fund between Board meetings we were pleased that one of us was elected to the Audit Committee and another as second Vice-Chair of the Standing Committee.
In conclusion: this was our first year at the board meeting during which we worked closely with other board members.

However, we do feel that in the future, Board members must pay more attention to issues of sustainability, governance and management of liabilities. Further, there is an important lack of expertise in areas of finance and management that needs to be corrected.

We also question the ability of a board composed of 33 members and an almost equal number of alternates, all meeting only once a year for five days, to properly oversee the ongoing operations of a complex fund with $60 billion in assets and obligations to 200,000 beneficiaries and contributors. This isn’t without risk and we have suggested more frequent Standing Committee meetings which would place the Board in a better position to exercise its responsibilities on a more regular and sustained basis. We have much to work on.

We will continue to keep you updated and thank you for your trust and support. We will continue to advocate on your behalf.

Mary Abu Rakabeh
Ibrahima Faye
Aissatou Ndeye Ndiaye
Bernadette Nyiratunga
Ian Richards
Michelle Rockcliffe

UN participant representatives

Chères et chers collègues

La réunion annuelle du Conseil d'Administration de la Caisse des Pensions de l'ONU vient de se terminer et nous souhaitons vous faire part des résultats à l’issue de ces rencontres. Les représentants du personnel de l'ONU étaient au nombre de 4 parmi les 33 membres du Conseil d'administration. Vous trouverez aussi en pièce jointe, la déclaration des fédérations du

Rapports d'Audit négatifs : le Conseil a examiné un certain nombre de rapports d'audit du Bureau des services de contrôle interne (OIOS) et du Comité des commissaires aux comptes (BOA). Certains ont été très négatifs, révélant entre autres un manque de collaboration de la part de la direction du Fonds avec les auditeurs ; des données incorrectes fournies aux actuaires ayant causé l’abandon et la non-publication du rapport actuariel ; ainsi que des informations inexactes
fournies au personnel de l'ONU quant au volume des arriérés de paiements des pensions.

Extension du mandat du Directeur général : Compte tenu de ce qui précède, et compte tenu des nombreux arriérés de paiements aux nouveaux retraités ; du manque de plan de contingence et des mauvaises relations de gestion du personnel au sein du Fonds de la Pension, nous avons par ailleurs collaboré étroitement avec autres représentants du Conseil et fait le plaidoyer pour le non-renouvellement du Directeur général, Mr Sergio Arvizu pour un autre mandat de cinq ans.

La réduction à trois ans de ce deuxième mandat non renouvelable couplée de mesures de suivi spéciales avec la mise en place d’un comité de recherche pour trouver un successeur et aussi l’impossibilité de démarrer de nouveaux projets sans l'approbation du Conseil d'administration, sont le résultat d'une longue et difficile session. Ceci constitue un signal fort.

Par ailleurs, la décision du Conseil concernant le renouvellement du mandat du Directeur general de la Pension n'est qu'une recommandation faite au Secrétaire Général des Nations Unies, qui seul devra prendre la décision finale.

Budget : Le Conseil a approuvé une forte augmentation du budget du secrétariat du Fonds, qui comprenait la création de nouveaux postes, notamment à des grades élevés. Nous avons clairement indiqué nos réserves quant à cette hausse budgétaire que nous avons qualifiée d’irresponsable, d'autant plus que ces postes seront payés par vous avec toutes les incidences négatives que cela aura sur la situation financière à venir du Fonds. L'Assemblée Générale devra en décider durant l’Automne.

Durabilité dans le long terme : le Fonds se trouve actuellement dans une situation de faibles rendements de ses investissements avec un budget croissant. Parallèlement, il connait un ratio élevé entre le nombre de ses bénéficiaires et celui de ses contributeurs et un ratio tout aussi élevé entre le nombre de personnel temporaire et celui du personnel régulier. Ce problème fundamental n'a pas été discuté bien que nous considérons qu’il est un des défis majeurs auquel le Fonds fait
face en ce moment. Nous espérons que cela sera à l'ordre du jour l'année prochaine.

Les tentatives du Directeur général d’empêcher les membres élus du Conseil
d'administration de participer aux rencontres : Deux représentants du personnel de l'ONU ont été empêchés d'assister au Conseil malgré que le fait que 4 600 d'entre vous aient signé une pétition. Le Directeur général a avancé la notion de conflits d'intérêts. Nous n’en sommes pas convaincus. Le Secrétaire Général, lors de son allocution et entretien avec tout le Personnel la semaine passée, ne semblait non plus en être convaincu. Ce problème est actuellement traité au Tribunal d'Appel des Nations Unies.

Monitoring et suivi : Afin de contribuer au monitoring et au suivi dans la gestion du Fonds durant les périodes entre les réunions du Conseil, nous avons été ravis d'avoir obtenu l'appui des membres du Conseil d'administration qui ont bien voulu élire un de nos représentants comme membre du Comité d'Audit et un autre membre comme Vice-Président du Comité Permanent.

En conclusion : Cette rencontre a été notre première année au Conseil où nous avons pu travailler en étroite collaboration avec les autres membres du Conseil d'Administration. Cependant, nous pensons qu’à l'avenir, le Conseil devrait accorder plus d'attention aux questions de durabilité, de gouvernance et de gestion. En outre, il existe un manque criant d'expertise dans les domaines de la finance et de la gestion qui doit être corrigé. Nous remettons également en  question la capacité de gestion d'un Conseil composé de 33 membres et d'un nombre quasi
équivalent de suppléants, qui ne se réunit qu’une seule fois par année pendant cinq jours, pour superviser correctement les opérations en cours d'un Fonds aussi complexe avec plus 60 milliards de dollars d'actifs et d’obligations pour les 200 000 bénéficiaires et contributeurs que nous sommes.

Ce n'est certes pas sans risque, et nous croyons que le Conseil doit trouver un moyen d'assumer ses fonctions de manière plus responsable, plus régulière et consistante. Nous avons donc beaucoup à faire!

Nous continuerons à vous tenir au courant et vous remercions pour votre confiance et votre soutien. Nous continuerons à plaider en votre nom et en votre faveur.

Mary Abu Rakabeh
Ibrahima Faye
Aissatou Ndeye Ndiaye
Bernadette Nyiratunga
Ian Richards
Michelle Rockcliffe
Représentants des participants de l'ONU
(See attached file: PBFederationStatement (1).pdf)

9.         Broadcast UN HQ: Staff Union info session on the Pension Fund

HQ NY Secretariat
Date: 07/27/2017 06:37AM
Subject: REMINDER: Staff Union Info Session on the Pension Fund (UNJSPF); TODAY 27 July 2017 11:30 am in CR3


REMINDER: The United Nations Staff Union is holding an information session today for all current staff members and retirees of the United Nations Joint Staff Pension Fund (UNJSPF).

WHEN: Thursday, 27 July 2017
WHERE: Conference Room 3
TIME: 11:30 am to 1:00 pm

This meeting is intended to better educate staff members about different types of pension plans, particularly the difference between a "defined benefit" and a "defined contribution" pension. Currently, UN staff who are participants of the UNJSPF contribute to a plan that has a defined benefit.  Changing the design of the UNJSPF plan is not being considered in the Pension Board meeting currently taking place in Vienna and as far as we are aware is not planned to be considered in the future. It should be noted that it would not be possible for any changes to be made to the UN Pension Fund plan without first having a recommendation from the Pension Board and then approval of the United Nations General Assembly. 

Your Staff Union is pleased to bring you a panel of highly qualified specialists in the field to educate us on the pros and cons of each plan and to answer your questions.

Panel Members:
Ms. Bailey Childers, Executive Director, National Public Pension Coalition
Mr. John Abraham, Research and Strategic Initiatives Department, AFT
Mr. Sugiyama Iutaka, Former Chief, Pension Entitlements Section, UNJSPF; Retiree

Moderator: Ms. Bibi Khan, President UNSU-New York

Warm regards,
The UN Staff Union

[1] Specifically, as per an opinion letter issued by the United Nations Under-Secretary-General for Legal Affairs on 17 June 2002, “[I]n United Nations practice, the concept of “consensus” is understood to mean the practice of adoption of resolutions or decisions by general agreement without resort to voting in the absence of any formal objection that would stand in the way of a decision being declared adopted in that manner”.

Date: 10 July 2017 at 10:21:18 PM
Subject: Message from UN participant representatives to the Pension Fund / Message des représentants des participants de l'ONU au Fonds de Pension
Dear UN Colleagues,
As representatives of UN staff to the pension fund, elected by you in April, we would like to update you on preparations for the forthcoming annual board meeting, which takes place 24 to 28 July in Vienna.
Issues to which we are devoting particular attention are: the large backlog of payment delays to retirees; proposals to increase the top-heavy nature of the pension fund administrative budget; the need for proposals to speed up the first payment upon retirement; investment underperformance; and in the context of the above, the proposals to renew the current leadership.
However, our work has been severely hampered by the fact that important documents, some running to over 200 pages, have been shared very late and well past the six-week deadline. And some have yet to be shared.
We are also concerned by a statement made by the fund CEO, Sergio Arvizu, to a meeting of New York-based retirees, in which he heavily emphasized the trend of pension funds ceasing to provide a pension linked to length of service and final salary, without closing the possibility of this happening at the UN. We are worried about this development and believe the closing of our unique defined benefit scheme would signal a major abrogation of responsibility by the employer and a significant cut to the UN’s social security provision. We will be seeking further clarification on this matter very shortly.
Finally we are contesting the decision of the CEO to block the presence of two UN participant representatives among us at the board’s meeting. We continue to believe that excluding elected members from the board violates due process, results in the disenfranchisement of over 86,000 participants and removes the ability of staff to scrutinize and have a say in their own pension fund as was the intention of the General Assembly when it established the tripartite board.
We will continue to keep you updated as we approach the board. In the meantime we encourage you to read this informative open letter below (English only) written to the Chair of the board.
Thank you,
Mary Abu Rakabeh
Ibrahima Faye
Aissatou Ndeye Ndiaye
Bernadette Nyiratunga
Ian Richards
Michelle Rockcliffe
Chères et chers collègues à l'ONU,
En notre qualité de Représentants des participants de l'ONU au Fonds de Pension, élus par vous en Avril dernier, nous souhaitons vous informer sur les préparatifs de la prochaine réunion annuelle du conseil d'administration qui aura lieu du 24 au 28 juillet à Vienne.
Les problèmes auxquels nous accordons une attention particulière sont les suivants: l'arriéré important des retards de paiement aux retraités; Propositions visant à accroître le budget administratif du Fonds de Pension; La nécessité de mise en place de propositions visant à accélérer le premier versement de pension à la retraite; Sous-performance de l'investissement; et des propositions pour renouveler le leadership actuel.
Cependant, notre travail a été gravement entravé par le fait que des documents importants, dont certains comptent plus de 200 pages, ont été partagés très tardivement et bien après le délai de six semaines requis. Et certains document n’ont meme pas encore été partagés jusqu’à ce jour.
Nous sommes également préoccupés par une déclaration faite par le chef de la direction du fonds, Sergio Arvizu, à une réunion des retraités à New York, dans laquelle il a fortement souligné que le fonds de pension cesserait de fournir une pension liée à votre durée de service et au salaire final, tout en n'excluant pas la possibilité que cela se produise également à l'ONU. Nous sommes préoccupés par ce développement et nous croyons que la fermeture de notre régime unique de prestations définies signifierait une abrogation majeure de la responsabilité de l'employeur et une réduction importante de la provision pour la sécurité sociale de l'ONU. Nous essayerons d’obtenir d'autres précisions sur cette question très prochainement.
Enfin, nous contestons la décision du chef de la direction d’interdire la présence de deux de nos représentants des Participants des Nations Unies lors de la réunion du conseil d'administration. Nous continuons de croire que l'exclusion des membres élus du conseil constitue une violation grave de la procédure régulière qui entraîne la privation de droits de plus de 86 000 participants et supprime la capacité du personnel à examiner et à avoir son mot à dire dans sa propre caisse de retraite, comme l'avait prévu l’Assemblée Générale lors de la création du conseil d'administration tripartite.
Nous continuerons de vous tenir au courant de l'approche du conseil d'administration. En attendant, nous vous encourageons à lire cette lettre ouverte informative ci-dessous (en anglais seulement) écrite au président du conseil d'administration.
Mary Abu Rakabeh
Ibrahima Faye
Aissatou Ndeye Ndiaye
Bernadette Nyiratunga
Ian Richards
Michelle Rockcliffe
Open letter to Mr. Vladimir Yossifov
Chairman of the United Nations Joint Staff Pension Board

7 July 2017
Dear Mr. Yossifov,
Subject: Matters of concern before the upcoming Pension Board meeting, 24-28 July 2017, Vienna
With regard to the annual Pension Board meeting, which will take place in Vienna from 24 to 28 July 2017, while we are not privy to the Board’s agenda, we understand that several important topics will be before the Board for discussion.
Specifically, the issues of investment underperformance and the unprecedented backlog in benefit payments, as variously detailed in General Assembly resolution 71/265, Board of Auditors report A/71/5 Add 16, Advisory Committee on Administrative and Budgetary Questions (ACABQ) report A/71/621, Pension Board report A/71/9, and Office of Internal Oversight Services (OIOS) audit 2017/2, are among the issues requiring the Board’s attention.
In this connection, we are concerned about divergent messages in the statements of the Fund’s Chief Executive Officer, Sergio Arvizu, and the Representative of the Secretary-General for Investments, Carol Boykin, at the annual assembly of the Association of Former International Civil Servants/New York (AFICS/NY), held on 27 June 2017. A video of the meeting is available here for your ease of reference:…/association-of-former-…/5485264583001…
Strangely, investment performance was one of the primary topics of Mr. Arvizu’s presentation, although it does not fall under his area of responsibility. The fund is increasingly dependent on investments to remain solvent, he noted. In this connection, he said, many large organizations, including the World Bank, have moved away from the defined benefit model (the UN pension fund model), where the employer takes all the risks, to the defined contribution model, where the employer transfers all the risks to the employee. Mr. Arvizu’s reference to this issue is curious, indeed.
Any such move in that direction would fundamentally change the purpose of the UN Pension Fund: the social security of United Nations employees worldwide. These provocative and troubling speculations by Mr. Arvizu undermine staff confidence and invoke longstanding concerns of the UN staff federations and others, about his past moves to consolidate and privatize the fund.
Regarding the backlog in pension payments, once again Mr. Arvizu’s focus was exclusively on “actionable” cases. He noted in this regard: “We’re addressing all of the straightforward cases within the same month, and the remaining balance is less than one week, or one week, and we follow the industry practice of 80-20”.
Absent from his presentation was any mention of the thousands of pending cases of other types, as detailed in the audit of the Office of Internal Oversight Services mentioned above. How can Mr. Arvizu be expected to address a problem he is unwilling to even acknowledge?
Ms. Boykin presented a Power Point array of investment charts, in dazzling detail, “in the spirit of continual improvement in transparency”, noting in this regard: “We have had a lot of questions about the performance of the fund, and we’ve heard people saying that we’re underperforming. We’re not underperforming.”
Ms. Boykin’s characterization of concerns about the fund’s investment underperformance as “people saying we’re underperforming” seems oblivious to the fact that these views were expressed by major UN bodies (the General Assembly, the Pension Board, the ACABQ, the Assets and Liabilities Monitoring Committee), not just “people saying.”
While Ms. Boykin acknowledged in her statement that the Fund underperformed in investments in 2016, it is documented in the reports of these major UN bodies that the Fund also underperformed in the 2014-2015 biennium.
Further, and contrary to Ms. Boykin’s statement that “in Q1 2017 we were right on top of our benchmark. . . So we’re right in line with the benchmark this year”, according to the Fund’s publicly available investment report for May 2017, the Fund returned 8.24 per cent while the policy benchmark returned 8.51 per cent, i.e, the Fund underperformed by 0.27 per cent. (See May 31, 2017 monthly report here): How can Ms. Boykin be expected to address a problem she’s unwilling to even acknowledge?
On a more realistic note, we were gratified that the Chef de Cabinet, Ms. Maria Luiza Ribeiro Viotti, noted that the “Secretary-General is aware of your concerns” and that “The Pension Fund’s backlog of actionable cases and management issues has caused hardships for thousands of employees.” Further, she said, while progress had been made on actionable cases, “there are still other pending cases related to deferred pensions, special and recalculation cases, as well as non-actionable cases pending receipt of additional information.”
Ms. Ribeiro Viotti also provided a welcome reality check on investments, noting that the Secretary-General, who “has a fiduciary responsibility, is looking forward to the board’s consideration” of “a review of the fund’s investment practices, risk management and investment performance conducted by an independent third party.
In this regard, we were also gratified to hear from Warren Sach, chair of the AFICS/NY pension committee and Federation of Association of International Civil Servants (FAFICS) representative to the Board, that “pension delays are unacceptable” and that the Board will “spend considerable time” on the issues of the backlog in pension payments and the independent third-party review. Investment underperformance in 2016, he noted, “means that the value of assets of the fund as at year end 2016 were nearly $1 billion or $937 million below what they would have been if the Pension Fund portfolio performed as well as the market as measured by the policy benchmark.” (If one adds underperformance of $147 million up to May 2017, in less than eighteen months, the Fund has underperformed by $1.084 billion.)
Of particular significance was Mr. Sach’s statement (quote): “Do not be misled into thinking that mere growth in assets of the Fund to new highs in billions of dollars means that investments are performing optimally. It is performance relative to the market that matters.”
We are not misled on the topic of the Fund’s investment underperformance. We also do not believe that this underperformance is owed to the “market favoring indexation over active management” as Mr. Boykin contends.
Neither are we misled on the issue of the backlog in pension payments. While we note Mr. Arvizu’s claim, and Mr. Sach’s resolve to support his request for more resources, we do not believe that the backlog in pension benefits or issues with client services can be solved by additional resources alone. The OIOS audit points squarely to managerial deficiencies in the Fund Secretariat and there is no clear indication that these have been resolved.
Finally, we wish to state our concern about your active support of Mr. Arvizu in blocking two duly elected participant representatives to the UN Staff Pension Committee from participating in the Board, despite assurances that arrangements could be made to avoid potential conflicts of interest. This, unfortunately, echoes the Board’s reported muzzling of the UN staff federations at last year’s board meeting, and continues to cause us serious concern about the fairness and objectivity of the Board’s proceedings.
There are grave matters before the Board that will affect the future of our Fund, including decisions about changes to its leadership moving forward. We urge you to eschew partisanship for leadership on decisions that will ensure that our Fund continues on a healthy track for the benefit of both current and future beneficiaries.
Yours sincerely,
Lowell Flanders
Loraine Rickard-Martin
Maria Luiza Ribeiro Viotti
Jan Beagle
Sergio Arvizu
Carol Boykin
Ian Richards
Diab El-Tabari
Dimitri Samaras
Stephen Towler
UNJSPF Board representatives
FAFICS members
AFICS/NY Governing Board members