FAFICS: the need for effective leadership; comments on the FAFICS president's update of 8 January 2018, 14 January 2018

14 January 2018

Dear FAFICS members and associate members,

Subject: FAFICS: the need for effective leadership; comments on the FAFICS president’s update dated 8 January 2018

Further to my communication of 4 January 2018, I wish to draw your attention to several instances of misinformation and distortion of facts contained in the FAFICS (Federation of Associations of Former International Civil Servants) president’s “update” of 8 January 2018.

As you’re aware, FAFICS holds four seats (plus two alternate seats) on the Pension Board, without voting rights. The FAFICS president sits on the Board as the representative of UN retirees worldwide. From this position of authority and influence, she has demonstrated, as in this “update”, a pattern of partisanship, non-transparency, manipulation of information, and attempts to discredit anyone who questions or opposes her actions.

Following are some examples of the misleading information contained in the FAFICS president’s “update” and my responses:

1.         “. . . the Board’s Audit Committee [has] the delegated responsibility for dealing with internal and external audit issues.”

Response: The Board, at its 2017 session, in recommending the CEO for a five-year and eventual three-year reappointment, had the benefit of three brief paragraphs (25 to 27) in the report of the Audit Committee dated 12 July 2017 pertaining to the Committee’s consideration of OIOS audit 2017/002 (70 pages with appendices) on the role of mismanagement in the unprecedented backlog in pension payments. The Committee, rather mildly, (quote from para. 27)  “[took] note of the improvement in benefit processing…. noted that the Fund defined actionable cases as those where all the required documents had been received …[and] continued to believe that additional work is needed to provide an accurate inventory of workflows elsewhere in the pipeline.” A scant three months later, on 11 October 2017, OIOS audit 2017/104 on post-IPAS implementation detailed many of the same unresolved issues as reported in audit 2017/002.

2.          “It may reasonably be questioned as to whether the General Assembly, without prior discussion in and substantive debate by the Pension Board, is indeed able to undertake a governance review of the structure of the Pension Board.”

Response: The Board is a subsidiary of the General Assembly. The Assembly has the authority, without prior discussion or debate in the Board, “to request the Secretary-General to entrust the Office of Internal Oversight Services with conducting a comprehensive audit of the governance structure of the UN Joint Staff Pension Fund Board, to include a review of the checks and balances between the Board and the Pension Fund leadership” (para. 8 of GA resolution A/RES/72/262). The FAFICS president may address any concerns directly to the General Assembly.

3.         “Under Fund operations, IPAS is cited along with the need to improve processing times to avoid continuing process delays, but 2.5 years after the implementation of IPAS, these delays are largely a thing of the past.”

Response: “Delays are largely a thing of the past” only for those who choose to believe the Fund’s definition of “backlog”, which as OIOS audit 2017/002 points out in its Executive Summary, there were as of 13 February 2017 thousands of outstanding cases as follows:  Quote: “OIOS is of the view that these recommendations cannot be closed because the Fund’s definition of “backlog” did not include all types of outstanding cases. The audit showed that 305 Article 32 cases, 852 cases opened before 1 January 2014 that were ready to be processed, and 554 cases assigned to the Pension Entitlements Section before 1 March 2016 were not included in the “backlog” reported by the Fund as of 1 March 2016 even though all three separation documents had been received for these cases. In addition there were 4,091 outstanding recalculation and revision cases which were not included in the “backlog” reported by the Fund. Furthermore, of the 11,128 cases with incomplete documentation reported by the Fund on 7 July 2016, there were 2,889 outstanding cases relating to former staff members (i.e. inactive participants).”

4.          “…there was not a single report of missed payment for [existing retirees]

Response:  Nowhere is it stated that the backlog was about “missed payments for [existing retirees].” It was always about unprecedented delays in payments for new retirees and staff separation cases, survivors, and other beneficiaries.

5.         “The previous year there had been a positive preliminary evaluation of the CEO after four years.”

Response: There was indeed a positive preliminary evaluation of the CEO conducted in 2015 by the bureau of the 62^nd session, based on the 2013-2014 performance period (see para. 375 of the 2016 Pension Board report (A/71/9)), the session at which some members of the Board, including the FAFICS president attempted to push through an advance reappointment of the CEO for five years. The evaluation appears to have been deliberately based on the period before the role of mismanagement in the Fund secretariat was documented in OIOS audit 2017/002 of the pension backlog (dated 13 February 2017). The same outdated performance evaluation appears to have been considered at the Board’s 2017 session when a failed attempt was again made to push through a five-year reappointment of the CEO.

6.         “…it came as a surprise that the representative of the United Nations Executive heads together with the participant representatives on the United Nations SPC (of which the CCISUA President is a member and leading critic of the Pension Fund, the CEO and governance structure of the Pension Board) and a small minority of other Board members opposed any extension [of the CEO’s contract].”

Response: That the Secretary-General’s representatives on the Board, i.e., the UN Executive heads, stood with the UN participant representatives on the issue of no reappointment of the CEO should not have been a “surprise” to anyone on the Board. OIOS had duly documented in its audit 2017/002 of 13 February 2017 the role of mismanagement in the backlog in pension payments. Other reported mismanagement in the Fund secretariat, in implementing IPAS and irregularities in contracts and procurement, were subsequently borne out in OIOS audits 2017/104 dated 11 October 2017 and 2017/110 dated 31 October 2017. 

The CCISUA President, whom the FAFICS president characterizes as a “leading critic of the Pension Fund, the CEO and governance structure of the Pension Board” heads an organization that together with other UN staff associations, FICSA and UNISERV, represent 110,000 participants of the Fund. CCISUA has stood firmly with the other staff associations in representing the interests of their constituents (active UN staff) against mismanagement in the Fund secretariat and lax oversight by the Board, as borne out and documented in the reports of UN governing bodies and OIOS audits. In doing so, and by default, the UN staff unions have filled the vacuum left by FAFICS in effectively representing the overlapping interests of UN retirees.

7.         “…the participant representatives on the UNSPC…wrote to [the Secretary-General] after the Board session on 28 August 2017 to urge him to ignore the recommendation of the Pension Board and continued to push an anti-board, anti-CEO platform.”

Response: The UN participant representatives acted for the health of our Fund and for safeguarding the vital interests of their constituents. Again, the FAFICS president’s language reflects her tendency to view criticism as subversion. The UN participant representatives, who, at the Board’s 2017 session were pressured into a consensus vote for a final three-year appointment for the CEO with oversight provisions, on the understanding that they could register an objection in the minutes, and were subsequently denied that opportunity, wrote to the Secretary-General as follows (quote): “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 UN’s management and participant representatives, representing two-thirds of the Fund’s members, were against recommending any reappointment of the CEO”. Given that the Board had based its evaluation of the CEO on the 2013-2014 performance period, the UN participant representatives asked the Secretary-General to take into consideration information not considered in the evaluation, regarding the role of mismanagement in the Fund. The letter noted that their objection was based on reasons which included that: “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.”

8.          “Although the Pension Board has sole authority for the appointment and renewal of the CEO, the Secretary-General has the administrative function to issue the contract…..”

Response: The FAFICS President implies that the Secretary-General lacks any discretionary role in appointing or renewing the CEO’s contract and that his sole function is to execute the wishes of the Pension Board. The letter dated 7 December 2017 from the Chef de Cabinet to the Board Chair rebuts this assertion as follows: “In this regard, the Secretary-General holds the power of appointment of the Chief Executive Officer of the Fund, pursuant to Article 101 of the Charter of the United Nations and Article 7 of the Regulations of the Fund.”

9.          “The Secretary-General did [not issue] a probationary appointment [of the CEO]. Had he done so, moreover, it would have been functionally inappropriate.”

Response: No one has stated that the Secretary-General “issued a probationary appointment” of the CEO. However, as the Chef de Cabinet states in her letter to the Pension Board Chair on 7 December 2017, “the Secretary-General holds the power of appointment of the Chief Executive Officer of the Fund, pursuant to Article 101 of the Charter of the United Nations and Article 7 of the Regulations of the Fund”.  It was clearly within his prerogative had he chosen to do so. The Secretary-General, as also stated in the 7 December 2017 letter from the Chef de Cabinet to the Pension Board Chair, accepted the Board’s recommendation of a three-year reappointment, with the CEO’s continuation to be reconsidered in light of a further recommendation by the Board, subject to review of his performance, i.e., in effect placing him on probation. Quote: “Therefore, while I wish to advise that the Secretary-General has accepted the recommendation of the board for the reappointment of the Chief Executive Officer for a second term of three years, he will nevertheless reconsider the continuation of such appointment after taking into consideration a further recommendation by the Board next summer. In this regard, the Secretary-General expects that the Pension Board will closely monitor the performance of the Chief Executive Officer, and, following its upcoming sixty-fifth session in July, will report to him on the progress made by the Chief Executive Officer in addressing the performance issues of the Fund. . .  Consequently, in light of the requested further recommendation by the Board on the continuation of the appointment of the Chief Executive Officer, the Secretary-General reserves the option to take appropriate action at that time.”

10.       “… communications….are written and sent by a disgruntled and unprincipled individual who has no standing in FAFICS, the Pension Fund, or any other part of the United Nations system, and represents no one.”

Response: As stated above, the FAFICS president’s uses terms such as “disgruntled” and “unprincipled” to disparage and discredit anyone who questions or criticizes her actions and manipulates information so as to depict the statements of others as “spurious” (false). Moreover, she should state the “standing” she believes is required in order to have the right to share and comment on the reports of UN governing bodies, internal audits, and other documents pertaining to the health of our Fund, beyond that of a retired UN staff member (with 37 years of service), a UNJSPF member for 46 years,  and a dues-paying member of AFICS/NY in good standing. She should also state where and when I have claimed to represent anyone. The FAFICS website should reflect a fraction of the transparency of the pension blog, which has meticulously documented all reports and other relevant communications relating to the Fund since the beginning of 2015.

11.       “FAFICS has continued to lend its support to the CEO and I continue to be viciously attacked as if we were purposely and perversely supporting an official we knew to be incompetent. Surely our knowledge and experience of what is truly transpiring in the Fund and how the CEO has been operating would not permit us to follow such a course.”

Response: “Lend its support” does not adequately describe the FAFICS president’s demonstrated unconditional support for the CEO including (i) writing an email to OIOS on 1 June 2016 discouraging the audit of the backlog in pension payments which has caused untold suffering to new retirees and other beneficiaries; (ii) pushing for his advance reappointment in 2016 based on an outdated performance evaluation; and again for a renewed five year term in 2017, while disregarding the accumulated information contained in the reports of UN governing bodies and OIOS audit 2017/002 concerning the role of mismanagement in the Fund.

Regarding her claim that she’s “viciously attacked” see my response (10) above. “Our knowledge and experience of what is truly transpiring” is obtuse language indicating that either a) the FAFICS president believes that she and her cohorts are privy to knowledge that contradicts what the rest of us are reading in the reports of UN governing bodies and OIOS audits; or b) that her own dearly held personal views are all that count.

12. “It is our considered opinion that IPAS has so far been largely successful with the exception of some unfortunate delays during the first year of its rollout, delays which have now been largely corrected.”

Response: The FAFICS president appears to believe that “our considered opinion” takes precedence over OIOS audit 2017/104 on post-IPAS implementation that directly contradicts reports made by the CEO to the Pension Board in 2016 and 2017 that the system was working successfully. It also contradicts a largely positive report from July 2016 by PraceWaterhouseCoopers (PWC) on IPAS implementation and other issues which the CEO presented to the Board.  Among the OIOS audit’s findings are that project costs of the system have more than doubled; weaknesses in the system have increased manual processing; the system and its infrastructure may be susceptible to security breaches; and a majority of top-priority benefit types (survivor, disability, and reinstatement benefits) were not included in testing of the system before it was launched.

13. “…we would caution you to take with a big grain of salt the continuing false reports of thousands of unpaid widows and orphans…”

Response: Nowhere has it been stated that there are “thousands of unpaid widows and orphans”. Instead what has been reported accurately, is that there are thousands of unpaid beneficiaries remaining, including widows and orphans.

14. “The same UNSPC member is already campaigning in the Board against inclusion of FAFICS on the selection committee and the reasons are obvious – FAFICS will not agree to the ongoing and undeserved vilification of the Pension Fund and the CEO which have been so personally and institutionally damaging.”

Response: The reasons are indeed obvious – that the FAFICS president’s performance and record to date demonstrate that she cannot be relied upon to act in a fair and unbiased manner. In referring to “ongoing and undeserved vilification of the Pension Fund and the CEO” the FAFICS president appears to consider information contained in the reports of UN governing bodies and OIOS audits as vendettas against the Fund leadership and Board and as a personal affront to her, and masks her agenda behind the charge that transparency is “personally and institutionally damaging.”

15. “…some of you have said that FAFICS should provide copies on its website of various reports such as those of ACABQ, the Board of Auditors and OIOS. We would point out that all of these reports are publicly available on the UN.org website where they originate. FAICS has limited administrative resources…..”

Response: The FAFICS president’s actions in systematically withholding, manipulating and selectively sharing information, both in her current position and as president of AFICS/NY, has nothing to do with “limited administrative resources” and everything to do with her determination to limit transparency by strictly control the flow of information, and suppress criticism. The FAFICS website, and the AFICS/NY website noticeably include only Fund newsletters, AFICS and FAFICS communications (to, but not from, her constituents), and none of the relevant General Assembly resolutions, reports of UN governing bodies or OIOS audit reports.

Throughout her “update”, the FAFICS president attempts to distort information, confuse her readers, and deflect attention away from the substantive issues at hand.

I urge FAFICS members and associate members to resist being distracted by distortion of the essential facts: As a result of problems besetting both sides of the Fund as detailed in two General Assembly resolutions (A/RES/71/265 and A/RES/72/262), reports of the Board of Auditors (A/71/5.Add/16 and A/72/5/Add.16) ACABQ reports (A/71/621 and 72/7/Add.23), and OIOS audits (2017/002, 2017/104 and 2017/110), the Secretary-General decided to replace his Representative for Investments, and to reappoint the CEO for a final three-year term while making his continuation subject to performance monitoring, in effect, placing him on probation; and the General Assembly has “Requested the Secretary-General to entrust the Office of Internal Oversight Services with conducting a comprehensive audit of the governance structure of the UN Joint Staff Pension Fund Board, to include a review of the checks and balances between the Board and the Pension Fund leadership”.  

Over the past three years plus, the FAFICS president has played a key role in actions with the potential to negatively affect the health of our Fund, including:  (i) supporting increased autonomy for the CEO in staff-management, financial and procurement matters; (ii) participating in evaluating the CEO’s performance positively and pushing for advance renewal of his contract in 2016 and again in 2017, without reference to information of which she was certainly aware concerning the role of mismanagement in the Fund secretariat, borne out in reports of UN governing bodies and OIOS audits 2017/02, 2017/104, and 2017/110; (iii) writing to OIOS on 2 June 2016 discouraging an audit of the backlog in pension payments which caused untold suffering to new retirees, beneficiaries and survivors, in which she questioned the need for and timing of the audit, the definition of “backlog”, described the reported delays as “anecdotal”,  and lamented the “noise from [the staff unions that] has clouded the issue and served only to spread fear and anger”; (iv) failing to consulted FAFICS members about positions taken at the Pension Board; (v) consistently dismissing concerns expressed by her constituents; including, as president of AFICS/NY, declining to hold consultations when requested, in writing, under the bylaws; (v) manipulating information, attempting to silence dissent, and publicly disparaging her critics as a way to discredit them.

Indeed, in this “update” the FAFICS president maligns the head of the Coordinating Committee for International Staff Unions and Associations (CCISUA), and the UN participant representatives to the Pension Board of which he’s a member.  She expresses “surprise” at the action of the representative of the UN Executive heads (the Secretary-General’s representatives on the Board) in standing with the UN participant representatives in opposing any reappointment of the CEO.  Moreover, she questions the Secretary-General’s authority to appoint the CEO; and the General Assembly’s authority to request “a comprehensive audit of the governance structure of the [Board] to include a review of the checks and balances between the Board and the Pension Fund”.

Many of the developments initiated by UN governing bodies and the Secretary-General in recent weeks have been positive. Nonetheless, progress will depend on the good faith efforts of those in positions of authority and trust to ensure proper implementation.

In summary, the FAFICS president has failed time and again to demonstrate the essential qualities of impartiality, transparency, discipline and temperament required for effectively carrying out the functions of the office.

The FAFICS president will not voluntarily relinquish her position. For the sake of the continued health of the Fund, I urge FAFICS members and associated members to independently assess the facts and take the necessary action to ensure that FAFICS has the caliber of leadership that enables it to assume its important role in effectively representing the interests of UN retirees worldwide.

Sincerely,

Loraine Rickard-Martin

Member, AFICS/NY

http://unpension.blogspot.com/

c.c. Members of the Pension Board