UN Staff Unions: Procurement scandals and cover-ups at UN Pension Fund, SG urged not to renew its CEO, 14 December 2017

FROM THE UN STAFF UNIONS: Procurement scandals and cover-ups at pension fund; SG urged not to renew its CEO

"UN Secretary-General António Guterres has been requested by the Pension Fund Board to extend the contract of CEO Arvizú by three years. Given the abundance of information showing our pension fund being managed outside the rules, we ask Mr. Guterres to seriously consider whether an extension would be in the interests of ensuring management accountability at the UN.'

"From: "BROADCAST-UNHQ" <broadcast-unhq@un.org>
Date: 14 December 2017 at 21:34:13 CET
To: "HQ NY Secretariat"
Subject: FROM THE UN STAFF UNIONS: Procurement scandals and cover-ups at pension fund; SG urged not to renew its CEO
Reply-To: "Ian Richards" 

This message is sent by UN staff unions on behalf of the UN participant representatives to the Pension Board.
(version française en bas de page)

Dear Colleagues,

We would like to share with you two recently-issued OIOS audits on the UN Pension Fund.
The procurement audit http://www.ccisua.org/wp-content/uploads/2017/11/2017_110_PWCProcurementIrregularities.pdf focuses on a $2.2 million contract with consulting firm PriceWaterhouse Coopers (PWC) and notes that of the total, $1.8 million was not spent on services specified in the contract. Thus costs could have been inflated due to lack of competitive bidding for the $1.8 million of services and greater use of partners costing $475 an hour. It appears that procurement rules may also not have been followed.

The second audit

http://www.ccisua.org/…/upl…/2017/11/2017_104_IPASIssues.pdf  covers the implementation of the new system for paying pensions, called IPAS, whose poorly managed implementation left newly retiring staff with no income for more than nine months. It notes that a number of important elements with IPAS, including relating to payments for widows and orphans, were noted as critical, even as the system was reported to the Board and external stakeholders as being ready to implement. It could be argued that given these issues were known prior to implementation, they should have been addressed, which would have to a large extent avoided the payment backlog.

Both audits are in line with the report of the UN Board of Auditors.http://www.un.org/ga/search/view_doc.asp?symbol=A/72/5/Add.16

This comes shortly after the UN Appeals Tribunal ruled that the Fund acted illegally in excluding two board members that had been elected by UN staff and who were known to be critical of the performance of Fund CEO Sergio Arvizú. http://www.un.org/…/…/files/unat/judgments/2017-UNAT-807.pdf and  http://www.un.org/…/…/files/unat/judgments/2017-UNAT-801.pdf

The General Assembly, meeting on 5 December also raised concerns about service quality and transparency https://www.un.org/press/en/2017/gaab4261.doc.htm

UN Secretary-General António Guterres has been requested by the Pension Fund Board to extend the contract of CEO Arvizú by three years. Given the abundance of information showing our pension fund being managed outside the rules, we ask Mr. Guterres to seriously consider whether an extension would be in the interests of ensuring management accountability at the UN.

This article from the UN Pension Blog is also worth reading:
10 December: UN Appeals Tribunal rules on unlawful actions by Pension Board http://unpension.blogspot.ch/2017/12/un-appeals-tribunal-rules-on-unlawful.html

15 November: Long overdue: A new boss at the UN Pension Fund and a reformed Board http://unpension.blogspot.ch/2017/11/long-overdue-new-boss-at-un-pension.html

Kind regards,

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

UN participant representatives to the Pension Board

-----------------------------

Ce message est envoyé par les syndicats de l’ONU de la part des Représentants du personnel de l'ONU auprès du Conseil d'administration de la caisse des pensions.

Chers collègues,

Nous aimerions partager avec vous les résultats de deux audits menés par l'OIOS en relation avec la Caisse des pensions.

Le premier audit http://www.ccisua.org/wp-content/uploads/2017/11/2017_110_PWCProcurementIrregularities.pdf… (en anglais seulement) concerne un contrat d'achat d'une valeur de 2,2 millions de dollars signé avec la firme "PriceWaterhouse Coopers" (PWC).Cet audit a montré que la somme de 1,8 millions de dollars n'a pas été dépensée en contrepartie des services mentionnés dans le contrat. Par conséquent, les coûts pourraient avoir été gonflés en l'absence d'un appel d'offres concurrentiel et du recours aux services de partenaires payés 475 dollars de l'heure.

Le deuxième audit (http://www.ccisua.org/…/upl…/2017/11/2017_104_IPASIssues.pdf 

(en anglais seulement) concerne l'adoption du nouveau système de paiement appelé IPAS, dont l'introduction inadéquate a laissé un nombre de nouveaux retraités sans revenus pendant plusieurs mois. L'audit montre qu'un nombre important d'éléments de l'IPAS n’étaient pas prêts (comme le calcul des indemnités pour les veufs et orphelins) et malgré cela le système a été présenté au Comité mixte (conseil d'administration) et aux parties prenantes externes comme étant prêt à être introduit. Il est fort probable que si ces questions avaient été traitées en avance, l'on aurait pu éviter, dans une large mesure, le retard dans le versement des indemnités.

Ces deux audits renforcent les conclusion du rapport du Comité des commissaires aux comptes des Nations unies http://www.un.org/ga/search/view_doc.asp?symbol=A/72/5/Add.16

Ces rapports suivent deux jugements du Tribunal d’appel selon lesquels la Caisse des pensions a agit de manière illégale en voulant exclure deux membres du Comité mixte, élus par le personnel de l’ONU. (Ces membres avaient critiqué auparavant l’Administrateur de la Caisse, M. Sergio Arvizú.) http://www.un.org/…/…/files/unat/judgments/2017-UNAT-807.pdf

et http://www.un.org/…/…/files/unat/judgments/2017-UNAT-801.pdf

L’Assemblé générale, réunit le 5 décembre, a également soulevé des soucis au niveau de la qualité du service fournit et de la transparence (https://www.un.org/press/en/2017/gaab4261.doc.htm

Le Comité mixte a demandé au Secrétaire général, M. António Guterres de renouveler le contrat de l'Administrateur Arvizú pour trois ans. Au vue des nouvelles informations démontrant une zone de non-droit au sein de l’administration de la Caisse, nous demandons au Secrétaire général de revoir de près si un tel renouvellement irait dans le sens de l'obligation redditionnelle des fonctionnaires de l'ONU.

Nous vous encourageons à lire ces articles (en anglais seulement) publié dans le UN Pension Blog :
10 December: UN Appeals Tribunal rules on unlawful actions by Pension Board http://unpension.blogspot.ch/2017/12/un-appeals-tribunal-rules-on-unlawful.html

15 November: Long overdue: A new boss at the UN Pension Fund and a reformed Board http://unpension.blogspot.ch/2017/11/long-overdue-new-boss-at-un-pension.html Kind regards,

Avec nos meilleures salutations,

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

Représentants du personnel de l'ONU auprès du Conseil d'administration de la caisse des pensions

Fifth Committee raises concerns about the UN Pension Fund, 11 December 2017

Concerns Raised about Service Quality, Failure to Meet Investment Return Target, as Fifth Committee Discusses United Nations Pension Fund Budget

With the assets of the United Nations Joint Staff Pension Fund totalling a record $62 billion at the end of October, delegates today expressed concern over the quality of service it provided to its more than 200,000 participants, as well as its failure in 2016 to meet its return‑on‑investment target, as the Fifth Committee (Administrative and Budgetary) took up the Fund’s proposed budget for the biennium 2018‑2019.

With officials of the Fund making the case for a bigger budget to hire more staff to service an ever‑growing worldwide clientele, speakers also emphasized the need for transparency and for strong risk management, including anti‑fraud measures, for the entity that extends pensions and benefits for the United Nations and 23 other international organizations.. .

CLICK TO READ FULL ARTICLE

https://www.un.org/press/en/2017/gaab4261.doc.htm

UN Appeals Tribunal rules on unlawful actions by Pension Board, 10 December 2017

On 27 October 2017, the UN Appeals Tribunal ruled that the actions of the UN Pension Board to block two elected UN participant representatives from the  Board were unlawful (UNAT Judgment No. 2017-UNAT-807; Rockcliffe (Appellant) v.United Nations Joint Staff Pension Board (Respondent); Counsel for Appellant: George G. Irving; Counsel for Respondent: Sergio B. Arvizú, and Judgment No. 2017-UNAT-801; Faye (Appellant) v. United Nations Joint Staff Pension Board (Respondent); Counsel for Appellant: self-represented; Counsel for Respondent: Sergio B. Arvizú, links below to the judgments).

Recall that two recent internal audits of the Fund secretariat conducted by the UN Office of Internal Oversight Services and completed in October 2017, revealed disturbing findings about lax controls and management in the Fund secretariat as CEO Sergio Arvizu’s five-year contract nears its end on 31 December 2017 (Nos. 2017/104, 2017/110). 

UNAT's ruling is further indication that for the sake of the Fund, Arvizu must go and that the Board, which lacks oversight and transparency, is in need of reform. The Board appears to have ignored OIOS audit 2017/02 on the backlog in pension payments in pushing for a three-year contract extension for Arvizu at its July meeting. It then hopped on board a claim of conflict of interest posited by the Fund's Chief, Risk Management and Legal Services (para. 3 of the judgment) backed by Arvizu --related to a 1992 legal opinion which had never been put into effect and which UNAT found to be baseless -- to try to block the two duly elected participant representatives from the Board.  

In the Fund secretariat, the buck stops with Arvizu, but a triumvirate of senior managers shares responsibility for mismanagement detailed in OIOS audits and other reports, and must all be held accountable, including for the recent rejection by the UN Board of Auditors of the actuarial valuation for 2017 because of unreliable data provided by the Fund --yet another managerial mishap on which the Board failed to exercise its oversight role. 

Quote from the Rockcliffe judgment, identical to the Faye Judgment : “It is the ruling of the Appeals Tribunal that Ms. Rockcliffe as a duly elected member of the UNSPC has the same rights and privileges which are bestowed on other UNSPC members and she ought not to be denied those rights. We therefore order that Ms. Rockcliffe is granted access to all relevant Pension Board documents. We further order that she is allowed to participate and function as an elected member to the UNSPC in all relevant areas including the preparations for the Pension Board sessions and meetings and its constituent groups, committees and working groups.”

Long overdue: A new boss at the UN Pension Fund and a reformed Board, 15 November 2017

An important change was made to the United Nations pension fund last month, when Secretary-General António Guterres announced he was appointing Sudhir Rajkumar of India to succeed Carol Boykin as his representative for investments of the $61.5 billion fund.

Guterres needs to make another major change, however, to address serious problems at the joint staff pension fund. Two recent UN internal audits detail irregularities in procurement and contracts in the fund’s secretariat, headed by Sergio Arvizu, the chief executive officer. Many fund observers inside and outside the UN consider these new developments not only more indication that Arvizu must go, but also that the pension board needs to improve its oversight and requires structural reform.

READ FULL ARTICLE HERE:

http://www.passblue.com/2017/11/15/long-overdue-a-new-boss-at-the-un-pension-fund-and-a-reformed-board/

Pension Fund: UN audit finds $1.8 million in unauthorized spending, 10 November 2017

AT UN PENSION FUND, WITH $1.8 MILLION IN UNAUTHORIZED SPENDING, SG GUTERRES TO KEEP ARVIZU? 

Nov 9 at 11:47am
By Matthew Russell Lee, Exclusive Series

UNITED NATIONS, November 9 – With UN Pension Fund problems including late payments and $3.4 billion in foreign exchange costs leading to the departure of Secretary General Antonio Guterres' representative to the Fund Carolyn Boykin, who issued a gag order to staff not to leak to Inner City Press, problems remain. On Halloween we first wrote of Boykin's replaced Sudhir Rajkumar, triggering much feedback into which, despite the restrictions and threats by Guterres' Department of Public Information, we are digging.

Now this: a UN Office of Internal Oversight Service audit has found at least $1.8 million in unauthorized spending, and much PCW work being done outside the contours of the agreed contract, at higher cost to the UN. We've put the audit online, here below, on Patreon, with these questions: [SEE LINK BELOW]

How much pension fund money was overspent on the 75 percent of services that were not bid for? (If there had been bidding for the other services, there may have been less use of $475 an hour partners. Having signed a contract for low-cost accountancy services, how did PWC accept to provide high-cost consultancy services without a new contract being signed? Was there collusion between PWC and Pension Fund staff? Doesn't the buck stop with, or in this case flow from, the CEO?

And this: the six UN Participant Representatives have asked Guterres to NOT reappoint the current CEO of the pension fund, Sergio Arvizu. We've published the letter on Patreon, here. Already, the Board has proposed only a three year and not a five year reappoint. The six UN Participant Representatives say it should be zero, based on: "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." On this last, the "UN Appeals Tribunal last week ruled illegal a decision by the pension fund’s board to exclude two of the six members that you, as UN staff, elected back in April."

We'll have more on this, and on what Guterres does."

LINK TO REPORT HERE (SCROLL DOWN TO 2017/110 ON THE LIST ON THE OIOS WEBSITE):

https://oios.un.org/page?slug=report

https://www.patreon.com/posts/15295191

UN Appeals Tribunal rules that CEO's ban on elected UN representatives is illegal, 27 October 2017

Message from the UN Participant Representatives to the Pension Board, 27 October 2017

"UN APPEALS TRIBUNAL RULES ELECTED UN REPRESENTATIVES CANNOT BE EXCLUDED FROM PENSION FUND BOARD

We are pleased to inform you that the UN Appeals Tribunal today ruled illegal a decision by pension fund CEO Sergio Arvizu to ban two elected staff representatives, Michelle Rockcliffe and Ibrahima Faye, from the fund's board.

The tribunal found there was no legal provision to back the CEO's actions.

For memory, the two representatives were banned despite being among the six successful candidates in the UN's staff pension committee elections in April, at which 18,000 staff voted.

The motivation behind the CEO's actions are impossible to know. But Michelle and Ibrahima's inside knowledge of the fund and its leadership could well have been embarrassing at the board following the mishandling of the new IT system during which newly retiring staff went up to 6 months without being paid, and a more recent incident during which incorrect data was given to the fund's actuaries.

The UNAT judgement vindicates the 4,500 staff who signed a petition protesting the ban and the staff unions, who through CCISUA staff federation, launched the legal appeal.

At the same time it shines a light on the legal and moral vacuum within the pension fund's leadership. To this end, the staff unions have made clear to UN Secretary-General Antonio Guterres that Arvizu should not be extended when his contract comes up for renewal at the end of this year. A new leadership is needed.

Here is a picture of the six UN participant representatives. Now we can sit together next time the board meets, and represent and defend the interests of 80,000 UN staff and its many retirees.

Thank you all for your support!"

UN Pension Fund: New Representative of the Secretary-General for Investments, 19 October 2017

THE FIRST WAVE OF NEEDED CHANGE AND HOPE IT'S GOOD FOR OUR FUND (Recall that the World Bank -- he's head of the global pension advisory programme at the World Bank -- according to the Fund CEO's public statement, joined large organizations that changed from defined benefit to defined contribution plan. But let's take a step back, welcome the change and give him a chance.)

UN SPOKESPERSON'S OFFICE

NEW RSG FOR THE UN PENSION FUND

"Secretary-General appoints Sudhir Rajkumar of India
as his Representative for United Nations Joint Staff Pension Fund Asset Investments

United Nations Secretary-General António Guterres announced today the appointment of Sudhir Rajkumar of India as Representative of the Secretary-General for the investment of the assets of the United Nations Joint Staff Pension Fund. He will succeed Carol Boykin of the United States to whom the Secretary-General is grateful for her commitment and dedicated service to the Organization.

Mr. Rajkumar brings to the position more than twenty-eight years of broad-based global investment experience, covering formulation and implementation of investment policies, and hands-on experience with global bond markets, private equity and project finance transactions, and corporate finance and privatization advisory engagements.

He is currently head of the global pension advisory programme at the World Bank Treasury, a role in which he has provided advisory services to the National Pension Fund of the Republic of Korea, Ministry of Finance of Brunei Darussalam, South Africa’s Government Employees Pension Fund, KWAP - Malaysia's second largest pension fund and the Nazarbayev University Endowment in Kazakhstan – in addition to other public investment institutions globally. He also currently serves as a member on the External Advisory Committee on Investments of the Food and Agriculture Organization, the Investment Committee of the United Nations Office for Project Services, and as Vice-Chair of the Board of Directors of the International Centre for Pension Management (ICPM).

Mr. Rajkumar began his career at the World Bank in Eastern Africa Operations as a Young Professional in 1988. Since then, he has worked in various regions and capacities with the World Bank and International Finance Corporation, including as Principal Investment Officer. Prior to this, he served in managerial positions with the Shriram Group in New Delhi and Kota, India.

Mr. Rajkumar holds a Master of Business Administration from the University of Chicago, a Master of Science in Economics from the London School of Economics and a Bachelor of Science in Engineering from the University of Delhi. He is co-editor and an author of the book Governance and Investment of Public Pension Assets: Practitioners’ Perspectives published by the World Bank.

New York, 19 October 2017"