UN Pension Fund: More rule-breaking in the strange saga of the Fund Secretariat leadership?

Update, Monday, December 30, 2019

Message on FCUNS Facebook page from Ian Richards, President, Coordinating Committee of International Staff Unions and Associations of the United Nations System

"I brought your article to the SG’s attention. Following the intervention the Acting CEO will now be leaving on 31 December. Ms McClean will become the new chief on 1 January and will, as proposed, be able to appoint an OiC to deputise until she is fully on board (and we wish her a swift recovery). So a good start to 2020!"

December 29, 2019

In the latest twist of the strange saga of the Fund Secretariat’s leadership, the much-awaited incoming head, Rosemarie McClean of Canada, former Chief Operating Officer of the Ontario Teachers Pension Plan, was reportedly injured last Thursday by a speeding car that jumped the curb.

According to information received, she suffered a broken leg and collarbone and will not be able to take up her new functions this week, on 2 January 2020.

https://www.un.org/press/en/2019/sga1899.doc.htm

Now reportedly the Secretary-General is being urged to appoint for a fourth term the fund’s controversial interim head and former nuclear negotiator at the IAEA since retired, Janice Dunn Lee, while keeping the Board in the dark and despite the fact that there’s no provision for such a move in Fund rules and regulations.

Fund regulations provide for a five-year term for the CEO and DCEO, with a single reappointment. There’s no provision for temporary appointments to these positions.

Yet, Lee has so far had three temporary appointments as Acting CEO with reportedly, a fourth being contemplated, outside Fund rules and regulations. It would appear that she is in no rush to leave her job nor give up her ASG salary in exchange for her former pension.

UN Pension Fund - the challenge of holding FAFICS accountable, 11 December 2019

Linda Saputelli: “Direct elections would in fact impoverish the contribution which retirees are currently able to make to UNJSPB governance processes.” 

Questions: What contribution? How does one “impoverish”  a non-existent consultative process?

FAFICS (the Federation of Associations of Former International Civil Servants) is the purported representative of UN retirees on pension and other matters.

But, the findings of the comprehensive governance audit by the UN internal auditors (UN Office of Internal Oversight Services, OIOS, A/73/341) beg the question that many UN retirees have been asking for years: Who does FAFICS actually represent?

https://undocs.org/A/73/341

Just as important, what does the FAFICS leadership want? They’re UN retirees too. Shouldn’t we all want the same thing – a healthy and sustainable Fund? But it’s never been clear what they want, besides the obvious – power.

We, the active and retired UN staff, members and owners of the Fund, pay for the participation of FAFICS representatives in pension matters.

Yet the FAFICS leadership has not merely shown time and again a lack of interest in our views. It’s tried consistently to silence and discredit opposing voices: UN retirees and the UN Participant Representatives to the Pension Board, who represent 85,000 active UN staff.

How can a non-transparent, undemocratic, and unrepresentative organization be held accountable for its actions?

How can UN retirees, and active staff (after all, we share the same interests) get FAFICS to release its vice-like grip on our pension system?

Who does FAFICS represent?

As the audit notes, FAFICS, which was created in 1971 and has 61 member associations worldwide, and represents about a quarter of the total number of UN beneficiaries.

This means that roughly three-quarters --more than 50,000 --  UN retirees and their dependents are not members of FAFICS, and many have never heard of the organization.

UN Pension Board report - Views of the UN Participant Represenatives (Excerpt: A/74/331)

UN Pension Board Report: Report of the Governance Working Group (excerpt: A/74/331)

FAFICS note to the Pension Board 2018 - Representation of retirees on the Pension Board

UN Pension Board - busted by the Fifth Committee, 3 Dec. 2019

UN PENSION FUND

SOME 5TH COMMITTEE HIGHLIGHTS (links to the statements are below. You're encourageed to read them in their entirety).

The Board Chair of our $67 billion dollar Fund states that "the Fund is in sound and solid footing, contrary to the propaganda mounted by its detractors over the past 4 to 5 years". Who are these "detractors"? Do they include, to his mind, UN oversight bodies that have uncovered serious deficiencies and pushed for essential reforms to ensure our Fund's sustainability? Are the findings of OIOS governance audit report A/73/341 and the related GA resolution A/RES/73/274 mere "propaganda"? Among the essential reforms, he bemoans as "complex and delicate" the key issue of the imbalance in Board composition (thus apparently unsolvable).

The Group of 77 apparently doesn't believe it's all mere "propaganda". It busts the Board for defying GA resolution directives (by including FAFICS representatives) on the composition of its Governance Working Group, and hopefully will reject their foot-dragging excuses about important reforms.

The 5th Committee is also not buying the “no backlog” mantra. Its members also want more information on the independence of the Board Secretary, staffing for the Fund, sustainable investing, and the Group of 77 flags the likely volatility of financial markets and rising geopolitical risks around the world and the imperative for investments to “meet the stated criteria of safety, profitability, liquidity and convertibility”. The US "encourage[s] the continued focus on strengthening the Office's operational risk control framework".

Pension Information Session

13 November 2019, UNHQ New York

http://webtv.un.org/watch/pension-information-session/6103864133001

UN Pension Fund - Analyzing the numbers, October 13, 2019

United Nations Joint Staff Pension Fund

Analyzing the numbers vs benchmark

Compiled by M. Rockcliffe

(Click on each image to enlarge)

Passblue: The $67 Billion UN Pension Fund: The Good, the Bad and the Ugly, October 10, 2019

"Since 2014, when staff members of the United Nations Pension Fund blew the whistle on serious mismanagement in its secretariat, a change in leadership has been made on both sides — assets and liabilities — of the $67.4 billion fund. Yet the turmoil persists.

Stabilizing the fund’s management and investment decisions has been mandated by General Assembly governance reforms that culminated in a 2018 resolution,A/RES/73/274, amid a continuing dysfunctional culture clouding the fund’s operations...."

Read the full article here:https://www.passblue.com/2019/10/10/the-67-billion-un-pension-fund-the-good-the-bad-and-the-ugly/

UN Pension Fund - UNPR Note - Direct election of retiree representation, 2019

Note by United Nations Participants’ Representatives

to the Pension Board

Direct Election of Retiree Representation on the Board

2019

Summary The  General Assembly in its Resolution 73/274 paragraph 14, noted that the Pension Board would consider issues of participation, rotation and equitable representation on the Board and would review inter alia the composition and size of the Board, including the role of retiree representatives and the modalities for directly electing retiree representatives to the Board, and requested the Board to provide detailed follow-up on all aspects of the resolution including on the implementation of the recommendations of the Office of Internal Oversight Services agreed to by the Board.

UN Pension Fund - UNPR Note - Enhancing processing and reducing forfeitures of benefits, 2019

Note by United Nations Participants’ Representatives
to the Pension Board

Modalities to enhance the processing and reduce forfeiture of benefits

2019

Summary In its resolution 73/274 paragraph 27 the General Assembly reiterated the need to enhance processing of the receipt of payments by some beneficiaries and stressed the need for the Fund to increase efforts to address the delays and proactively resolve open workflows and legacy and other outstanding cases……” [emphasis added] Thousands of legacy and outstanding cases are covered by the General Assembly’s request. The Pension Fund is unable to locate a vast number of former participants, children, and survivors because of the lack of follow-up shortly after separation or death.  The benefits are then forfeited and re-absorbed by the Fund which defeats the purpose of the Fund created to pay benefits.

UN Pension Fund - UNPR Note - Article 6: impact of proposed amendment, 2019

Note by United Nations Participants’ Representatives 

to the Pension Board

Amendment to Rule of Procedure C.1 and

Impact of 2018 proposed amendment to Article 6

2019

Summary The  General Assembly emphasized its existing prerogative on matters pertaining to the Fund in paragraph 5 of resolution 73/274, and in paragraph 21 recalled that it has sole and ultimate authority to approve amendments to the Regulations governing the Fund; Furthermore the GA requested in paragraph 20 that the Board to consider the impact of an amendment of Article 6. We find that the amendment to exclude certain participants of the Fund, would result in a double standard and violation of Article 8 of the United Nations Charter.

UN Pension Fund - UNPR Note: Partial payments to former participants, 2019

Note by United Nations Participants’ Representatives 
to the Pension Board

Partial Payments to former participants waiting for payment over 3 months

2018

Summary

The General Assembly having taken note of the OIOS comprehensive audit of the governance of the Pension Board also  in its resolution 73/274 that the Board requested 1 that “the Fund continue to work towards meeting the target of 15 business days for benefit processing for actionable cases,” and reiterated the need to enhance the processing of the receipt of payments by some beneficiaries”  and stressed the need for implementation of a system to prioritize the resolution of the most urgent and severe cases.

Statistics provided by the Secretariat show that there are at 1000 beneficiaries whose cases are described as “actionable” who could benefit from the implementation of the proposal made in JSPB/65/R.45 and R.45 Add2.

UN Pension Fund - UNPR Note - Limitation of liability for disability benefits, 2019

Note by United Nations Participants’ Representatives

to the Pension Board

Limitation of Liability for Disability benefits

 2019

Summary Paragraph General Assembly RES/73/274 highlighted the importance to ensure unfaltering accountability by the Board. Over the past several months Staff Pension Committees have been faced with disability cases where the official was on a “non-renewable” appointment of five years or less. Since disability benefits are based on a contributory service projected to the participant’s normal retirement age, the benefits derived in these cases is inconsistent with the temporary nature of the appointment and this loophole may often result in undue enrichment of those concerned

UN Pension Fund - UNPR Note - Composition of the Board, 2019

Note by United Nations Participants’ Representatives to the Pension Board Composition of the Board 2019

Background

1)    The current size and composition of the Pension Board was established in 1987 via resolution 42/222 when the General Assembly authorized 33 seats based on a tripartite structure. This resolution took effect on 1 January 1989 as promulgated.

2)    In 2002 the GA in resolution 57/286 requested the Pension Board to review its size and composition “with a view to making such representation more equitable in order to reflect the actual distribution of active participants in the Fund, present and future trends in Fund participation,”

UN Pension Fund - UNPR Note - Article 48: impact of proposed amendments, 2019

Note by United Nations Participants’ Representatives

to the Pension Board

Impact of 2018 proposed amendments to Article 48

2019

Summary Even though the proposal was not unanimous and did not represent a consensus, in 2018 the Board proposed to amend Article 48 in an attempt to reduce the jurisdiction of the United Nations Appeals Tribunal The General Assembly in their resolution 73/274 requested that the Pension Board “provide further analysis on the 2018 proposed amendment to Article 48 of the Regulations and Rules and Pension Adjustment System of the United Nations Joint Staff Pension Fund and to report thereon in the context of the next report.” The present proposal in the Note by the Secretary/CEO does not provide an analysis but merely proposes to re-submit an amendment.  It fails to address the underlying concerns of the General Assembly in making such a far-reaching change.

UN Pension Fund - UNPR Note - Terms of reference for Board members, 2019

Note by UN Participants’ Representatives

to the Pension Board

Terms of Reference for Members of the Pension Board

2019

Summary The General Assembly in is resolution 73/274 paragraph 14(a) noted that the Board would review The terms of reference, and self-evaluation methodology of Board members; The resolution takes note of the OIOS recommendation 1 in its report A/73/341 as follows: “The Board should: (a) establish clear terms of reference for its members outlining, inter alia, the desirable competencies for their appointment and any appropriate restrictions or limitations; and (b) review its current methodology for self-evaluation to make the exercise more effective and useful.”

UN’s Independent Audit Advisory Committee pushes back UN Pension Board, 5 September 2019

The UN’s  Independent Audit Advisory Committee (IACC) isn’t playing along with the UN Pension Board’s attempt to discredit the UN internal auditors as a ploy to disregard and circumvent General Assembly directives.

UN Pension Board members and the UN retiree representative organization, FAFICS, were so incensed about the OIOS governance audit (A/73/341) called for by General Assembly resolution A/RES/73/274, that they not only roundly rejected its findings and recommendations in Rome in 2018, but also pushed to discredit the internal auditors (UN Office of Internal Oversight Services, OIOS) and report them to the UN’s Independent Audit Advisory Committee for alleged unprofessionalism -- “flawed and unprofessional” is the language contained in the Board’s report (page 72, para. 345).  

 https://www.passblue.com/2018/08/27/the-un-pension-fund-board-rejects-an-audit-of-its-work/

In a subsequent annex to the governance audit, OIOS roundly refuted the Board’s allegations. It's difficult to recall a UN document where the words "This statement is not true" appear once, let alone several times, as is the case with OIOS responses to the Board's comments on the governance audit. https://unpension.blogspot.com/2019/09/un-internal-auditors-oios-response-to.html

UN internal auditors (OIOS) response to the UN Pension Board, 5 September 2019

UN Pension Fund Secretariat's leadership tries to union-bust to thwart General Assembly reforms, 26 August 2019

The Fund Secretariat management is, not surprisingly, unhappy about the report of the UN participant representatives to their 85,000 constituents about the Board's annual meeting in Nairobi last month, including various governance issues that pose serious risks to the health of the Fund, such as this about the backlog in pension payments (link to report below):

“It would appear from our estimates that around 4,000 beneficiaries have not been paid at all, with the funds owed to them at risk of being forfeited as deadlines pass.” 

Apparently the Fund Secretariat management has a new tactic -- attempted union-busting -- in its longstanding efforts to discredit the UN participant representatives, who are the duly elected representatives of 85,000 active staff of the UN and its funds and programs.

The Fund Secretariat has long under-reported the extent of the backlog, and currently claims that no backlog exists, contrary to informed analyses of the actual backlog. The new Entitlements Chief, Bernie Sheehan, has dived headlong into the fray, sharply disputing the reported backlog and claiming that staff under his supervision are upset about the report.

In addition, the Fund Secretariat  has reportedly unleashed its new communications officer (Serge Gas, brought over from IAEA by the Acting CEO, as her Special Assistant  and placed on a P5 post that was twice not approved by the UN General Assembly) presumably to promote the Fund Secretariat's false narrative.

For her part, the Staff UN president, Patricia Nemeth, refused to allow the UN participant representative's report to be published on her union's broadcast system and is blocking its publication on iSeek, the UN internal Intranet.

Why? She reportedly says she doesn’t believe the UN participant representatives’ reports of physical threats and intimidation at the Board meeting.  It’s offensive language, she says, unbecoming in tone. She exhorts them to instead, focus on “substance”.

What the UN Staff Union president seems to fail to understand that nothing is more anathema to substance than when participants in any fora are bullied and subjected to false pretexts to block their active participation, as was the case for the UN participant representatives, who are duly elected and accountable to their 85,000 constituents.

Wittingly or unwittingly joining forces with Fund Secretariat managers, Nemeth claims (in a Staff Union Broadcast today) that Fund staff deem the UN participants’ report as criticism and are thus disappointed, “despite the fact that they diligently come to work every day to make a difference”.

She either fails to recognize and doesn’t wish to, that the real “disgruntled” Fund staff are Fund Secretariat managers who dislike information going out about their ongoing dysfunction and will apparently stop at nothing to discredit its source.

The UN participant representatives have been consistent and diligent in their support of the hardworking staff of the Pension Fund whom they have noted time and again, are doing the best they can under the Fund Secretariat’s incompetent leadership.

The UN Staff Union president needs to wake up to the fact that by allowing herself to be weaponized by the Fund Secretariat leadership she’s jeopardizing the health of the UN Staff Union, while failing in her own responsibilities and obstructing the ability of others to serve the interests of their constituents.

Most important, the reforms contained in General Assembly resolution A/RES/73/274 stemmed from mismanagement and conflicts of interest by the Fund Secretariat under its former CEO, Sergio Arvizu. He’s gone, but his coterie, along with the culture  of dysfunction that he fostered remains intact, and has led the Pension Board in discrediting the governance audit (A/73/341) and foot-dragging on reforms.

The Fund Secretariat management must recognize that General Assembly reforms will not be thwarted by manipulation, circumvention, or by its new tactic of attempted union-busting.

http://unpension.blogspot.com/2019/08/un-pension-fund-staff-representatives.html