Note
by United Nations Participants’ Representatives
to the Pension Board
to the Pension Board
Modalities to enhance the processing and reduce forfeiture of benefits
2019
Summary
Background
1.
Having
considered the reports of the Board of Auditors in 2016 and 2017 and 2018
a.
The
General Assembly, in its resolution 72/262
paragraph
Notes
the progress made with regard to the
processing time of benefits payments in 2016, expresses concern at the
continued delays in the receipt of payments by some new beneficiaries and
retirees of the Fund, once again stresses the need for the Pension Board to
take appropriate steps to ensure that the Fund addresses the causes of such
delays, and in this regard requests an update in the context of the next report
of the Pension Board
b.
The
General Assembly in it resolution 73/274 paragraph
27. Reiterates the
need to enhance the processing of the receipt of payments by some
beneficiaries, and stresses the need for the Fund:
(a)
To increase
efforts to address the delays and
proactively resolve actionable cases, open workflows and legacy and other
outstanding cases and to ensure the implementation of a system to
prioritize the resolution of the most urgent and severe cases; [emphasis added]
2. In
December 2017 the Fund Secretariat acknowledged that there were 15,000
workflows pertaining to initial separations outstanding. With an addition 900 to 1000 new cases each
month, and recalculations due to death of retirees, deferred benefits coming
into payment and other recalculations that ensure the accuracy of payments, it
is not difficult to determine that there is still a backlog in processing,
whether it is a backlog of calculations that result in payments, or a backlog
in items that require data updates, there remains a backlog in the record
keeping of the Fund.
3.
The
numbers has been substantiated by the Board of Auditors and OIOS, and the
Senior Management of the Fund continues to provide reports periodically that
prove that there remains much to be done, even while asserting that “there is
no backlog”.
4.
Like the
General Assembly, UN Participants’ Representatives are of the view that the
Pension Secretariat must do more to proactively resolve outstanding cases.
Background
Missing
separation documents missing payment instructions and follow-up by the Fund
5.
Since the
mid-1990’s the UNSJPF has had access to Personnel Action documents of UN Family
organizations and for the last 5 years for Specialized Agencies also have
enough access to allow staff to verify participants’ pension status from date
of entry to date of separation.
6.
In IPAS automated
follow-up letters previously done manually.
The letters were implemented to mimic standard operation procedures PG
37[1]
and PG 36 Rev.2[2] (see annexes).
It was recognized in the High Level Business Case for IPAS that automated
follow-up letters was the functionality that would result in the most
efficiencies for the Fund.
7.
However
shortly after IPAS go-live, management decided to disable follow-up letters from
the view of all stakeholders except the Fund staff, rendering the functionality
useless, even though the reminder letters continue to be generated periodically
as designed in the system.
8. The
Pension Fund Secretariat should re-institute follow-up letters in IPAS so that
former participants could view them in Member Self Service and know what
documents are still required by the Fund for processing.
9.
Both the
Board of Auditors and OIOS in 2016 and 2078 audits of the Fund have made observations
about the amount of manual work after the implementation of the IPAS
system. [Recently consultants have also observed
that IPAS functionality is not being optimized.
10.
The OIOS
report 2017/002 paragraph 8 shows the accumulation of outstanding cases after
go-live had risen to 4709 initial separations where all documents had been
received by the Fund, and 4,870 outstanding recalculations and revision
cases. As of 2017 the Board of Auditors[3]
reported that 5,537 cases outstanding where all documents were received. At 31 December 2018 the number of cases
outstanding where all documents were received was 5,140.
11. Just as with automated follow-up
letters, there are too many manual interventions in calculations processing,
due to the fact that salary scales are not being systematically updated in the
IPAS system even though the functionality exists. With the benefits system pulling from salary
and pension scales as at August 2015, calculators must manually remove
incorrect data and re-insert the correct data resulting in highly inefficient
benefit processing.
12. The Fund should be proactive in
enabling IPAS functionality that already exists, so as to increase its
efficiency and effectiveness in benefits processing.
13. The Pension Fund should regularly update
reference data to allow automated functionality in IPAS to work, to increase
efficiency and processing time in the calculation of benefits.
Forfeitures
14. The Ageing analysis of cases deemed
nonactionable owing to non- receipt of documents, Table II.5 of the BOA report
shows that at 31 December 2017 there
were 2,471 cases separated over 3 years. While these cases have not yet gone through
the process by the Fund the indication is that most cases over 3 years old
should be placed on the forfeiture track or forfeited immediately. The 2018 Financial Statements[4]
show an increase in “process able” cases.
15. Because the Fund has deemed cases
“non-actionable” instead of following its own Procedures General, former participants
have become un-locatable an cases are written off as time allows”
16. UN Participants’ Representatives have
been told that once forfeited if a former participant makes a claim and
justifies they reason for the late claim, the Fund usually returns the
Funds. The real question here is, on
how many occasions has that happened? We believe the numbers stepping forward
are negligible. This is because until
recently there has been very little transparency about this matter.
17. There are thousands of former staff,
some who may have abandoned their posts after a war outbreak, or otherwise
displace, or just without the understanding that they have an amount – however
small – sitting in the Fund.
18. We have received many calls from Staff
Unions who know how much just $100 can do for a family in Africa, or the West
Bank. For at least three years Unions have suggested during Staff Management
Consultation for UN Family staff, that an escheatment list be placed on the
UNJSPF website that would enable former participants to be tracked down, in the
same manner as the UNFCU publishes an escheatment list for inactive accounts.
19. The Pension Fund has responded that
they believe there would be a violation of Administrative Rule B.4, however the
General Assembly has asked the Fund to be proactive.
20. UN Participants’ Representatives
therefore are proposing that:
a.
the names
of former participants who are about to forfeit their benefits are published, along
with information that cannot be deemed confidential – such as Last Duty Station
and Last known Country of Residence on the UNJSPF website.
b.
The first
list should include former participants whose benefits have been placed in
accounts payable or forfeited over the last 7 years and going forward should
become part of the standard operating procedures going forward.
21. The Fund secretariat should be more
proactive in the follow-up and the providing of necessary information to reduce
the number of benefits forfeited by former participants.
22. The
Board might wish to request the Pension Fund Secretariat to a) follow its [own]
institutional procedures general, b) keep reference tables updated and c) publish an Escheatment List, as a proactive
means of enhancing the receipt of payments by some beneficiaries as reiterated
by the General Assembly in 73/274.
1.
Standard
Procedures or “Procedures General” are stipulated by Administrative Rule A.1 in
Annex I of the UNSPF Regulation, Rules and Pension Adjustment System. The Fund
has two main Procedures general 36 Rev.2 and 37 which govern cases with missing
separation documents.
2.
PG-37
provides the procedures for Missing Separation Documents and Payment
Instructions. This was promulgated in 1991
3.
In 1999
Procedure General –PG-36 Rev 2, “Failure to Submit Payment Instructions” was
promulgated, superseding PG 36 Rev.1 of 1990 and procedures detailed for the handling of cases where separation
documentation has been received but not the payment instructions.
4.
Prior to
2018, Article 32 of the Funds’ Regulations was amended in 1998 by the General Assembly
at its fifty-third session allow former participants to defer election of the
choice of benefit for up to 36 months which previously it had been 12
months. This allows former participants
who think that they will become re-employed, to postpone submission of
instructions for payment, and to have their contributory service “deemed
continuous” if they re-enter the Fund within the said 36 months.
5.
The document explains the initial processing
including i) a letter of acknowledgement to the beneficiary, ii) processing in
case a discrepancy exists, iii) follow-up letter(s), and separation of the
case iv) separation tasks and v)
criteria for forfeiture of withdrawals, residual settlements and periodic benefits
which occur if no payment instruction is received within the 36 month period.
Annexed to the procedures are samples of letters to be used in every part of
the process.
Implementation
of procedures in IPAS
6.
PG-36
Rev.2 which has been effect since 1999, was implemented and automated in IPAS
at Go-Live. An Entitlement Workflow is created upon notification of the
Separation, and once payment instruction page 1 of the E/6 or E/7 forms are
received, the process is handled in line with PG 36 Rev 2.
a. A letter of acknowledgement to the
beneficiary is generated by IPAS which also explains that payment instructions
must be received within 36 months and provides the expiry date of the provision. (Procedure not being followed since
2016 when cases were first deemed “non-actionable”)
b. The reviewer would verify that all
contributions have been received and if discrepancies exist, make a request for
the adjustment of contributions – via another automated letter and linked
appropriately to the workflow. This step
is important as offices close and it is necessary to have contributions
reconciled and resolved immediately. (Procedure
not followed since 2016)
c.
If the
beneficiary decided at any point during the 36 months to submit payment
instructions the workflow is triggered and a specific line shows that PI has
been received for the Article 32 case. (If
step “a)” is not completed – cases are not in the correct state to be
triggered.)
d.
If no
Payment Instruction is received by the 33rd month the system
automatically generates a letter (also visible in Member Self Service) that
alerts the beneficiary of the expiry date and that the beneficiary with less
than 5 years of service would forfeit the benefit within the prescribed
time. For beneficiaries having more
than 5 years of contributory service the letter requests submission of the PI
and explains that the beneficiary would be deemed to have elected a deferred
retirement benefit.
e.
Once the
normal retirement is attained, a letter is generated (via batch) to request
payments instructions for benefits which have come into payment. These cases are forfeited 2 years after the
benefit became due.
7.
Similarly,
PG37 for “missing documents’ was also implemented in IPAS.
a.
Upon
receipt of any one separation document the system was designed to generate
follow-ups intermittently after 30 days of having received the first document.
b.
If at 36
months after separation no payment instruction has been received the case would
be processed to Accounts Payable – the first step on the path to forfeiture
8.
During
the time of implementation of IPAS and since go-live, entitlement cases which
are deemed “non-actionable” because there was no payment immediately requested,
explicitly requesting deferral or were missing documents, were put aside for a
later time and the standard operating procedure PG-36 was not complied
with.
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