Backlog in pension payments: the real story. 21 February 2017

According to the Fund's website, as of 1 February 2017, “The Fund is processing more than 80 per cent of actionable cases within 20 business days and aims to make this 100% in the coming months.”. The latest iSeek report refers to the processing benchmark (13 February 2017): “With the enhanced capacity of the task force, the Pension Fund has been able to achieve its processing time benchmark for the last two months…and we will continue to keep staff updated on the status of outstanding cases on an ongoing basis.”

It’s encouraging that the Fund is reporting that its processing benchmark, at least for some cases, is within a reasonable twenty business days.  Let’s recognize, however, that this is not the case for many beneficiaries. Some of us are fortunate to be located in New York or Geneva where we can walk into the Fund’s offices and eventually receive attention. But this is not the reality for many participants and beneficiaries, and many retirees, and some of the most vulnerable in terms of "other cases", including widows and survivors, are still waiting in a “non actionable” and unreported limbo of suffering (See open letter to the CEO dated 21 November 2016 on the blog).

(In the late 1990s, the Fund’s benchmark for payment of pension benefits was reportedly five 5 working days. At the beginning of the 2000s, it was ten working days. The 2015 Board of Auditors report, A/71/5.Add 16, paragraph 10, reported that 85 per cent of death-in-service, and 91 per cent of retirement and withdrawal cases were processed with delays ranging from 16 days to more than a year.)

Information provided by the Fund on the status of the backlog has long been contested by our staff federations, partly because reporting is consistently on "actionable" cases, i.e., cases for which all documentation is available. There's been  no reporting on what the Fund routinely describes in its iSeek messages as "other cases that are pending receipt of additional information from organizations or separated staff members, as well as a number of deferred pensions (through choice), special cases (such as survivor benefits, child benefits) and recalculation cases."  

The leaked OIOS audit of the backlog in pension payments (December 2016) confirmed many doubts about the CEO's narrative on both the causes and the status of the backlog. The finalized report is now available to Member States and should be available to the public shortly.

According to that report, the Fund Secretariat established task forces and obtained $3.2 million in additional resources in July 2016 to address the delays in processing of pension benefits.

Contrary to the persistent public relations narrative from the CEO that the backlog was caused by unforeseen increases in beneficiaries, by IT issues with Umoja, and by organizations failing to transmit necessary documentation, the evidence from the OIOS audit report attributes the backlog to several managerial failures regarding: i)  filling the Fund’s long vacant posts;  developing key performance indicators for all its benefit processing activities; improving its client services and processing of pension entitlements; and establishing performance metrics to monitor and report on all types of outstanding cases.

The key here is ‘all types of outstanding cases; not just “actionable” cases for which all documentation is available. But ALL cases ("other cases" as described by the Fund) including retirees, widows and orphans for which all documentation is not available. These cases are a humanitarian disaster which to this day goes unreported by the Fund. The Fund receives $20 million every two years to perform administrative tasks related to such cases and one wonders how these funds are actually being used.

The OIOS audit report also notes that “the outstanding cases predominantly occurred in 2015” and “the Fund’s financial statements and operations performance reports showed that the total number of new pension benefit cases (i.e. separations) and number of beneficiaries did not increase from 2014 to 2015.

Notes the report: “Further review of 3,568 cases indicated that it took on average 53 days from dispatch of documents by member organizations to inputting them in the system by the Record Management and Distribution Unit”.

That’s a delay of almost three months of working days between receiving documentation and inputting in the system. Yet the Fund has insisted all along that it’s missing documentation that is largely responsible for pension processing delays.

As for client services, the report notes that “a review of calls recorded through the hotline of the New York office in 2014, 2015 and 2016 indicated that the percentage of answered calls to all calls received during working hours was 2.5, 5.7, and 3.3 per cent. And there was no provision for callers to leave voicemails.”

The report concludes in this regard:  “This very low level of response to telephone calls was contrary to the UNJSPF Quality Management Policy which stated that the Fund should respond immediately to telephone calls during working hours.”

It will be interesting to finally have the OIOS audit publicly available not only for what it will reveal about the reality of the pension backlog. It will also add to the realistic picture set out by  the recent General Assembly resolution (A/RES/71/265) articulating problems on both sides of the Fund (Secretariat and Investment Management Division) and setting out necessary actions to address them if our Fund is to remain solvent. (Who's doing what and when about the resolution's requests to the Secretary-General and the Pension Board are questions that need answers.)

 The UNJSPF staff are diligent and hardworking and we thank them for their efforts. But let’s recognize that any operation needs proper management if it’s to perform effectively and that's an issue that needs to be addressed sooner rather than later.