UN Pension Fund : Loopholes and double standards in disability awards? 9 June 2019

A senior position at the UN can be an attractive prospect: nice salary, travel, and benefits including membership in the UN's pension fund, one of the few remaining final salary schemes, i.e., benefits received on retirement are based on earnings and length of membership in the scheme.

But the system reportedly includes loopholes that work for the benefit of some while imposing onerous costs on the Fund. At the same time, the system also penalizes others. 

Former Chief Executive Officer of the Pension Fund Secretariat, Sergio Arvizu, whose five-year contract ended in December 2017, fought hard for a second and final five-year term. This would have taken him to his normal retirement age, entitling him to a pension of some $91,000 per year.

Instead, after successive internal audits revealed mismanagement, conflicts of interest, and procurement irregularities under his leadership, Arvizu received a three-year reappointment. This would have meant leaving two years before the normal retirement age and receiving a reduced early pension.

The day after he received the bad news about his shortened term, Arvizu went on sick leave.  A year and a half later, he received a disability benefit through the International Atomic Energy Agency, where he never worked a day, instead of through the UN Staff Pension Committee..

As the disability benefit is based on the pension that he would have received had he worked until the normal retirement age, Arvizu can now look forward to about $85,000 a year, instead of $65,000 if he had completed the three-year contract.

The latest example of a high-level appointee awarded disability is Heidi Mendoza, Under-Secretary-General for Internal Oversight Services (Secretary-General's Note to the General Assembly, https://undocs.org/A/73/876,  Quote: "3. The Secretary-General wishes to inform the General Assembly that, on 23 April 2019, the United Nations Staff Pension Committee determined that Ms. Mendoza would need to foreshorten her appointment, with effect from 25 October 2019.")

Based on publicly available information (parameters necessary to calculate the estimated benefit, e.g., age, date of entry on duty, separation date, applicable Fund regulations, USG salary scale), beginning on October 26, 2019, Mendoza will receive an annual benefit of about $62,000 a year, instead of about $16,000, had she worked to the end of her non-renewable contract term.

In a related development, UN staff have complained that UN Medical and Human Resources are pushing them on to disability as a way to get them off payroll and out of the organization.

How should these issues be addressed? Should there be better scrutiny of disability awards, including possible loopholes for those with limited terms?

There’s clearly a double standard:  one set of rules for high-level staff, and another for those at lower levels, some of whom must wait months to receive a benefit even after the Committee approved an award while those at the higher level are fast-tracked.

Word is that the UN Staff Pension Committee is playing fast and loose with its rules and regulations in granting disability awards, taking decisions by email, disregarding the need for a quorum and refusing to  meet to discuss the oversight matters that would benefit the Fund’s members and its overall governance and sustainability.