The joint New Year’s message from the Fund management, Rosemarie McClean, Chief of Pension Administration, and Pedro Guazo, the UN Secretary-General’s Representative for Investments, (dated 30 December 2021, posted on the UNJSPF website, link below) is a clear celebration of the status quo reflected in perhaps the most “lowest common denominator” General Assembly resolution in years (see provisional version below).
The Fund management’s annual message is traditionally a cut and paste job of self-congratulation and this one is of the same variety, only with more superlatives.
That the duo believe they have reason to celebrate is not entirely unwarranted. Forces in the Fund management, the Pension Board, and the UN administration, have conspired for years to spin reality in their favor and silence dissent, and this year, they've clearly made some gains.
They’ve used intimidation or suspension of UN participant representatives (of 85,000 active UN staff) on the Pension Board, blocking the ability to broadcast messages to constituents, and colluding on “ethical” and “confidentiality” Board guidelines designed to thwart whistleblowers and quash dissent. Their effort reportedly gained from the election of allies of non-transparency in the most recent election of UN participant representatives to the Board, one of whom, a rank newcomer, reportedly scrambled, and failed, to be elected as the Board's Chair.
That the General Assembly “recognized and supported” the Pension Board’s governance reform that boils down to nothing more than cutting levels of attendance of hangers-ons (counted as high as 100 for a 33-member board) at meetings and instituting ethics mainly aimed at silencing dissent, constitutes the duo’s definition of governance success.
Their message makes no mention of the independent governance report requested by the GA last year and prepared by Mosaic that revealed a multitude of governance deficiencies (politely called “variances”) compared to other pension funds, including that Board members fail to understand the meaning of their “fiduciary responsibility” and require training.
Nor do they admit, in boasting that "90% of pension cases have been processed within 15 business days" over the past two years, that the Fund is so committed to “efficiency” that it instituted stopping and resuming the clock on benefits processing as an artificial strategy to achieve benchmarks. The Fund management never acknowledged any practical, or ethical, shortcomings in this strategy, and there’s no mention of the Board of Auditors' call for the practice to be stopped.
Still on this topic, one wouldn’t know from the sanitized message that the Fund reported to the ACABQ recently (paragraph 4 of ACABQ report A/76/7.Add 14) that an enhancement to IPAS (the benefits processing system) had been set up to address the longstanding and long-ignored concern and that “Under the new calculation methodology, the pausing (while awaiting external actions) and resetting of the benchmark was eliminated.”
We only hear that, somehow, they’re still managing to achieve this amazing result.
And where else but in spin-doctor universe would "Nearly 18% of the eligible population ... enrolled in the DCE [digital certificate of entitlement] in the last few months" be touted as a "real success"?
On investment, according to the message, investment returns are simply “spectacular” and there’s no hint that “The Advisory Committee notes that the investment performance of the Fund in 2020 is higher than the objective but lower than the benchmark in terms of annual rate of return and lower than the peers’ performance in terms of annualized rate of return over 10 years. “
In fact, “The Committee encourages the Fund to renew its efforts to improve the performance of the investments and explore the possibility of increasing its objective.”
Why spoil the celebration by mentioning last year’s investment governance audit (A/75/215, 21 July 2020) that found serious management failures or that the more recent human resources audit of the Office of Investment Management (OIM) (2021/038 dated 24 August 2021) raises continued concerns?
Similarly, there’s no trace of the GA resolution (75/246) last year having authorized the Secretary-General, as fiduciary of the Fund, at his request, to conduct margin trading (financial derivatives) on a two-year trial basis, or that at the time of the OIM’s human resources audit (August 2021), working groups set up by OIM to study the human resources requirements of expertise to conduct such trading were yet to conclude their work (paragraph 13c, page 2, of OIOS report 2021/038).
The joint message doesn’t mention the Pension Board’s "win" in, at last, having the GA approve changing of the Fund's Rules and Regulations to prohibit staff members of the Fund and its staff pension committees from running for election to the Pension Board.
Years of attempts to silence dissent have paid off. That’s a victory for the Fund management, Board members, and UN administration members, who want to safeguard their autocracy and control the level of oversight of the Fund.
Perhaps the management team also prefers to hold that blow to democracy, effective oversight, and sustainability of the Fund close to their vest while they continue to spin the narrative that “trust and confidence in the Fund are reconfirmed with this resolution …”.
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What are Fund members to take away from this end of year happy dance?
For one, the forces against transparency and democracy are riding high.
Still, the past several years have shown that despite the convergence of forces determined to limit democracy and transparency in the operations of the Fund, significant positive change has been wrought through the perseverance and courage of staff representatives and the dedication and integrity of UN internal auditors.
So much so, that for some time a level of desperation in countervailing actions has been apparent, including with the attempt last year by the ASG/Human Resources to bring the hammer down on former UN participant representatives to the Board for consulting with members of the General Assembly, the Fund’s ultimate oversight body.
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While the balance of power might seem to currently favor those who would wish to cloak the Fund in secrecy and undemocratic practices, that their goals are far removed from the principles, values, and standards of the pre-eminent international organization it serves should be a matter of serious concern to the Secretary-General, the General Assembly, and all stakeholders.
https://www.unjspf.org/message-from-rosemarie-mcclean-and-pedro-guazo-on-the-un-pension-fun
United Nations A/C.5/76/L.17
General Assembly Distr.: Limited
23 December 2021
Original: English
PROVISIONAL
Seventy-sixth session
Fifth Committee
Agenda item 138
Proposed programme budget for 2022
XIII
Administrative expenses of the United Nations Joint Staff Pension Fund
Recalling its resolution 70/238 A of 23 December 2015, section VIII of its
resolution 74/263 of 27 December 2019 and its resolution 75/246 of 31 December
2020,
Having considered the reports of the United Nations Joint Staff Pension
Board on the work of its sixty-eighth special session and of its sixty-ninth session and
administrative expenses of the United Nations Joint Staff Pension Fund,24 the report
of the Secretary-General on the administrative and financial implications arising from
the report of the United Nations Joint Staff Pension Board,25 the financial report and
audited financial statements for the year ended 31 December 2020 and the report of
the Board of Auditors on the Fund26 and the recommendations contained therein, the
report of the Chief Executive of Pension Administration and the Representative of the
Secretary General for the investment of the assets of the Fund on the implementation
of the recommendations of the Board of Auditors contained in its report for the year
ended 31 December 2020 on the United Nations Joint Staff Pension Fund 27 and the
related reports of the Advisory Committee on Administrative and Budgetary
Questions,28
1. Takes note of the reports of the United Nations Joint Staff Pension
Board27 and the report of the Secretary-General;28
2. Takes note of the report of the Chief Executive of Pension Administration
and the Representative of the Secretary General for the investment of the assets of the
Fund on the implementation of the recommendations of the Board of Auditors
contained in its report for the year ended 31 December 2020 on the United Nations
Joint Staff Pension Fund;27
3. Endorses the conclusions and recommendations contained in the reports
of the Advisory Committee,28 subject to the provisions of the present resolution;
4. Emphasizes the existing prerogative of the General Assembly on matters
pertaining to the Fund;
Financial statements of the United Nations Joint Staff Pension Fund and
report of the Board of Auditors
5. Reiterates the importance of the implementation of all the
recommendations of the Board of Auditors by the secretariat of the Fund, the Pension
__________________
24 A/75/9/Add.1 and A/76/297.
25 A/C.5/76/2.
26 A/76/5/Add.16.
27 A/76/294.
28 A/75/814 and A/76/7/Add.14 .
Board and the Representative of the Secretary-General, in full and in a timely manner,
and of reporting thereon in the next report to the General Assembly;
Actuarial matters
6. Stresses the importance of continuing to achieve the necessary 3.5 per
cent annual real rate of return on a long-term basis for the future solvency of the Fund;
Governance matters
7. Notes with appreciation the work of the Board on governance matters
carried out to approve the governance reform plan, taking into account best practices
as recommended by the Governance Working Group while respecting the unique
nature of the Fund, and looks forward to further information thereon in the next report
of the Board;
8. Recognizes the efforts of the Board to reduce the physical attendance and
its attempts to improve efficient and effective decision making and notes the decision
of the Board regarding the physical attendance at Board sessions as stated in paragraph
2 of Section VI. A in the report of the Board;
9. Further requests the Board to ensure that in the year 2022 the 18
representatives from the member organizations that have 1 or 2 voting Board members
do not attend the Board meetings in-person, and requests the Board to keep this
arrangement under review and provide its observations to the General Assembly at
the 77th session;
10. Decides that the Ethics adviser will be recruited under the modalities
applicable for general temporary positions;
11. Emphasizes that the Office of Internal Oversight Services shall remain
the sole internal oversight body of the secretariat of the Fund and its investments, in
line with the mandate of the Office, as set out by the General Assembly its resolution
48/218 B of 29 July 1994, and stresses that any change to the mandate in this regard
remains the sole prerogative of the Assembly;
12. Emphasizes that the budget of the Pension Fund should be accountable
to all stakeholders, including beneficiaries and the member organizations, and
encourages the Pension Board to strengthen the functions of the Budget Committee
with the aim to ensure proper oversight of the resource requirements in the light of
the operational needs and budget accuracy of the Pension Fund;
13. Recalls Annex III Section G of the report of the Board, and requests the
Board, in consultation with the Ethics Adviser, to revise and adjust it and to provide
further analysis of and clarification on it in the context of its next report;
Pension Board
14. Recalls paragraph 7 of its resolution 75/246, and reiterates its request
that the Secretary-General and the Pension Board ensure that the staff composition of
the Office of Investment Management and of the Pension Administration is based on
as wide a geographical basis as possible, bearing in mind Article 101, paragraph 3, of
the Charter of the United Nations, and to make every effort to provide an update on
progress achieved in the context of their next reports;
15. Encourages the Secretary of the Pension Board to continue to restructure
and streamline the report of the Board with the aim of making it more concise and to
the point and presenting the rationale of financial and administrative proposals in a
more comprehensive manner;
16. Highlights the importance attached by the General Assembly to
continuing to ensure accountability by the Pension Board, and requests the Board to
provide follow-up on all aspects of the implementation of the present resolution in the
context of its report to be submitted to the Assembly at its seventy-seventh session;
Pension Administration
17. Requests the Fund to continue to ensure cost-effectiveness and
appropriate geographical coverage of the call centre service operations;
Office of Investments Management
18. Reaffirms that the Secretary-General serves as fiduciary for the
investment of the assets of the Fund;
19. Reaffirms that the investment of the assets of the Fund shall be decided
upon by the Secretary-General after consultation with an Investments Committee and
in the light of observations and suggestions made from time to time by the Board on
the investments policy;
20. Notes that the annual real rate of return of the Fund for the 10-year and
15-year periods remained markedly above the long-term objective of 3.5 per cent, and
encourages the Fund to continue its efforts to improve the performance of its
investments and identify suitable comparators with peers from various countries and
provide a comparison thereof in the context of its next report;
21. Recalls the four main criteria for investment utilized by the Fund,
and requests the Secretary-General to explore, in consultation with the Investments
Committee and taking into account the observations and suggestions by the Board,
impact investing for part of the portfolio, including in developing and emerging
markets, such as Africa, bearing in mind the real rate of return target, and to report
thereon to the General Assembly in its next report;
22. Requests the Secretary-General, as fiduciary for the investment of the
assets of the Fund, to continue to diversify its investments among developed,
developing and emerging markets, wherever this serves the interests of the
participants and the beneficiaries of the Fund, and also requests the Secretary-General
to ensure that decisions concerning the investments of the Fund in any market are
implemented prudently, taking fully into account the four main criteria for investment,
namely, safety, profitability, liquidity and convertibility;
Other matters
23. Concurs, in accordance with article 13 of the Regulations of the Fund
and with a view to securing continuity of pension rights, with the new transfer
agreements of the Fund with the European Investment Bank and the European
Investment Fund, as approved by the Board and set out in annex VIII to its report;
24. Decides to approve the proposed amendments to articles 4 (c), 6, 7, 33
(g) of the Regulations of the Fund, as well as to paragraph 19 of the Pension
Adjustment System of the Fund, as set out in annex V to the report of the Board;
Budget estimates for the year 2022
25. Emphasizes that to review all the general temporary assistance positions
of the Fund is not to aim at necessarily converting positions into posts, but rather at
increasing efficiency through the elimination of duplication of functions;
26. Decides to reduce the proposed resources for travel of staff and
representatives by 25 per cent for the Secretariat of the Board, the Pension
administration and the Office of investment management;
27. Approves the changes to the staffing table as set out in the table below:
A. Secretariat of the Pension Board (PBS)
Action Title of post Category Number
Reclassification Senior Programme Management Officer P-4 to P-5 1
B. Pension Administration (PA)
Action Title of post Category Number
New post Accounting Assistant GS-OL 5
New post Benefits Assistant GS-OL 1
Total new posts 6
Conversion Benefits Officer P-3 1
Conversion Benefits Assistant GS-OL 14
Conversion Information/Documents Management Assistant GS-OL 6
Conversion Programme Management Officer P-4 1
Conversion Information Systems Officer P-4 1
Conversion Information Systems Officer P-3 3
Conversion * Accounting Assistant GS-OL 1
Total conversions 27
Total net changes 33
Reassignment Chief D-1 1
Reassignment Human Resources Officer P-4 1
Reassignment Benefits Officer P-3 2
Reassignment Benefits Assistant GS-OL 3
Redeployment (from EDM to POW) Chief of Business Transformation and
Accountability Unit
P-5 1
Redeployment (from EDM to POW) Risk Management Officer P-4 1
Redeployment (from EDM to POW) Programme Management Officer (Risk) P-3 1
Redeployment (from EDM to POW) Legal Officer (Compliance) P-3 1
Redeployment (from EDM to PS) Human Resources Officer P-3 1
Redeployment (from POW to PS) Administrative Assistant GS-OL 1
*From extrabudgetary
C. Office of Investment Management (OIM)
Action Title of post Category Number
New post Associate Legal Officer P-2/P-1 1
New post Legal Officer P-3 1
New post Deputy Director D-1 1
New post Investment Officer P-3 2
New post Investment Officer P-4 2
New post Senior Accounting Assistant GS-PL 1
New post Associate Risk Officer P-2/P-1 1
New post Compliance Officer P-3 1
New post Risk Officer P-4 1
New post Investment Officer P-3 3
New post Information Systems Officer P-3 2
Total new posts 16
Conversion Associate Investment Officer P-2/P-1 1
Conversion Investment Officer P-3 1
Conversion Investment Officer P-4 1
Conversion Accountant P-4 2
Conversion Associate Risk Officer P-2/P-1 1
Conversion Associate Compliance Officer P-2/P-1 1
Conversion Risk Officer P-3 1
Conversion Associate Information Systems Officer P-2/P-1 2
Conversion Information Systems Officer P-3 2
Conversion Senior Administrative Assistant GS-PL 1
Total conversions 13
Total net changes 29
Reclassification Senior Information Systems Officer P-4 to P-5 1
Reclassification Senior Information Technology Assistant GS-OL to GS-
PL
1
Reclassification Senior Accounting Assistant GS-OL to GS-
PL
2
Reclassification Senior Administrative Assistant GS-OL to GS-
PL
1
Redeployment (from EDM to POW) Director D-2 1
Redeployment (from EDM to POW) Investment Officer P-4 1
Redeployment (from EDM to POW) Staff Assistant GS-OL 1
Reassignment Senior Administrative Assistant GS-PL 1
19/28
D. Office of Internal Oversight Services (OIOS)
Action Title of post Category Number
Conversion Chief of section, Audit P-5 1
Conversion Auditor P-4 3
Conversion Auditor P-3 1
Conversion Audit Assistant GS-OL 1
Total net changes 6
28. Approves the estimates of 121,819,100 United States dollars for the
administration of the Fund for 2022;
29. Also approves expenses, chargeable directly to the Fund, totalling
113,514,900 dollars net for 2022;
30. Further approves the amount of 8,304,200 dollars as the cost of the
services provided by the United Nations Joint Staff Pension Fund to the secretariat of
the United Nations Staff Pension Committee for 2022, of which 5,065,600 dollars
would represent the share of the regular budget and the balance of 3,238,600 dollars
would represent the share of the funds and programmes;
31. Approves the increase of 82,900 dollars in the cost for the services
provided by the United Nations Joint Staff Pension Fund to the secretariat of the
United Nations Staff Pension Committee under section 1, Overall policymaking,
direction and coordination, of the proposed programme budget for 2022;
32. Authorizes the Board to supplement the voluntary contributions to the
