As per the message received by email today from the Fund and the message on the website (link below) inviting Fund beneficiaries to enroll in the digital CE (certificate of entitlement) system, I'm all for modernizing systems, but I have questions:
How much does it cost? While it's optional now, will it eventually become mandatory? Do we have to jump through the digital hoops annually? Who does this new system benefit and how, when many beneficiaries are not able to make use of it? What are the downsides, if any? Will we have a full and transparent accounting anytime soon?
In addition, in order to enroll in the system, Fund beneficiaries must download an app on our mobile device, make a video call through the app at the appointed time, and verify our biometric identity.
What about the many Fund beneficiaries (in AFICS/NY, fully 20 per cent) who do not use email and may not have electronic devices? If that's just New York, what about the numbers in other parts of the world?
And at the heart of my skepticism about this new development are serious questions of trust in the people managing and overseeing our Fund:
Why should we trust people (the Fund administration) who, as only one recent example, continue to claim astronomical compliance rates in benefit processing against the 15 business day benchmark? How? It turns out that they achieved this by stopping and starting the clock when documents are missing! What happened to basic transparency and integrity, not to mention common sense?
Here's what paragraph 27 of the latest General Assembly resolution (A75/246, link below) says in response to this unfathomable practice: "Requests the Pension Administration to continue to adhere to the target benchmark of 75 per cent of initial benefit processing in 15 business days and to eliminate the practice of postponing the benchmark for additional documentation requirements, according to the recommendation of the Board of Auditors in its report (A/75/5/Add.16), and to report the actual time for completion of the processing of initial benefits, including those without proper documentation as well as the reasons for exceeding the 15 business-day target benchmark as appropriate, in the context of the next report of the Pension Board".
Why should we trust people, the Fund management, who send out joint communiqués such as this one from 8 January 2021, touting only General Assembly decisions in its latest resolution that they believe paint a high gloss on their operations, without an ounce of transparency about other aspects of the resolution that are less than salutary, or serious deficiencies in pension governance detailed by independent external governance consultants, Mosaic, in their 2020 report (annex to the Board’s annual report A/75/9), or egregious shortcomings in investment governance detailed by the UN Office of Internal Oversight Management’s audit (A/75/215)? For example, there's nary a word about the General Assembly’s directives about how the Fund's curious method of assessing compliance performance or about the Geneva office that they gutted for reasons of which only they are aware.
Why should we trust people who crow about their investment and managerial achievements without a scintilla of transparency about their plans to invest the life savings of participants and beneficiaries in derivatives (that were notoriously at the heart of the 2008 financial crisis) or margin trading, or what the General Assembly has to say about these moves in paragraph 33 of its latest resolution: A/75/246:
“33. Notes the report of the Representative of the Secretary-General on the proposal of the Pension Board to engage, for the first time, in a range of derivative instruments available to the Fund, to effectively manage the Fund’s investments and address the increasing complexity of the global capital markets environment, and in this context requests the Secretary-General to submit more detailed proposals to the General Assembly at its seventy-sixth session, including information on the use of derivative instruments, engagement in margin trading and participation in securities lending, as well as compliance measures, with a view to ensuring strict adherence to the existing policies and accountability framework and a cost-effective investment strategy, and authorizes the Secretary-General to conduct margin trading for the limited purpose set out in paragraphs 43 and 44 of his report11 on a trial basis for two years;”
Why should we trust people such as the Pension Board chair, also head of UNHR, who recently moved to discredit UN Participant Representatives to the Board who have courageously advocated for the interests of Fund participants and beneficiaries, in the face of attempts to intimidate, silence and discredit them, and, in one case, professional marginalization?
Why should we trust people who kick General Assembly reforms down the road, making repeated attempts to change Fund rules and regulations, as one example, to limit the jurisdiction of the UN Appeals Tribunal, while circumventing reforms aimed at curbing conflicts of interest, and prompting the Assembly to note in paragraphs 16 and 21 of its resolution regarding splitting of the functions of Chief Executive Office and Secretary of the Board and gutting of the Geneva office:
“16. Recalls its resolutions 73/274 and 74/263, in which it decided that the Secretary of the Pension Board should be fully independent of the Chief Executive of Pension Administration, and requests the Board to include the terms of reference and related reporting lines for both the Secretary and the Chief Executive in the context of the next report;
21. Recalls paragraph 35 of section VIII of its resolution 74/263, and requests the Pension Board to clarify the functional responsibilities and reporting lines of the New York and Geneva offices and to submit, in the context of its next report, information on specific measures to ensure the efficiency of the Geneva office in rendering services to clients;".
https://www.passblue.com/2020/11/12/the-75-billion-un-pension-fund-kicking-reforms-down-the-road/
Why should we trust people who, as we speak, are devising a Code of Conduct (Fund management and Governance Working Group of the board) originally drafted by the Fund’s legal section, aimed at curtailing transparency and gagging any board member who doesn’t toe the party line?
One of the shocking but not surprising findings in the Mosaic governance study that we won't hear about in any Fund communiqué is that among board members, there is “confusion about the roles and mandates of the board” and a lack of clarity about the legal and organizational status of the fund and the board’s fiduciary responsibilities. Clearly, if they don't know what they're supposed to be doing to safeguard our interests, it's unreasonable to expect them to do so effectively, if at all.
Have we learned nothing from recent events about the power of selective information or disinformation to delude, or about the intentions, and potential for wreaking havoc, of those who prioritize personal ambition, control and power over responsibility and accountability?
After more than six years of intensive Fund-watching -- of rinse-and-repeat cycles of egregious management and oversight failures, whistleblowing, denial, retaliation, internal audits, pushback, sudden departures of leaders on sick leave or for "family" reasons, installation of promising new leaders, their seeming co-option, recommended reforms, and foot-dragging on implementation -- I'm deeply disturbed by the evident extent to which uninformed and willfully ignorant members of the Board can be manipulated by a self-interested senior Fund management and calculating Board members in their midst (including FAFICS, the purported retiree representative organization).
After more than six years of intensive Fund-watching, I'd like to be able to trust these people, but the record so far isn't favorable. I can only say that a high market value of assets, while it lasts, may be dazzling. But it neither compensates for, or provides comfort against disturbing evidence of an ongoing lack of transparency and accountability among those charged with managing and overseeing our Fund that requires our continued vigilance and effective action.
https://documents-dds-ny.un.org/doc/UNDOC/GEN/N21/001/87/PDF/N2100187.pdf?OpenElement
Loraine Rickard-Martin
29 January 2021
No comments:
Post a Comment