Note by United Nations Participants’ Representatives
to the Pension Board
to the Pension Board
Partial Payments to former participants waiting for payment over 3
months
2018
Summary
The General
Assembly having taken
note of the OIOS comprehensive audit
of the governance
of the Pension Board also in its resolution 73/274 that
the Board requested
1 that “the Fund continue
to work towards meeting the
target of 15
business days for benefit processing for
actionable cases,” and reiterated the need to enhance the processing of
the receipt of payments
by
some beneficiaries” and stressed the need for implementation of
a system
to prioritize the resolution of the most urgent and severe cases.
Statistics provided by the Secretariat show that there are at
1000 beneficiaries
whose cases are
described as “actionable” who could benefit from the implementation of the proposal made in JSPB/65/R.45
and R.45 Add2.
In view of the request
from the General Assembly the Board
may wish to reconsider and approve this proposal for implementation of partial payments
to beneficiaries
waiting
for payment over 3 months
Amendment to Provisional Payments
Mechanism
Note by the United
Nations Staff Pension
Committee
At its 325th and 326th meetings, the United
Nations Staff Pension Committee considered proposals by the Participants’ Representatives to amend the provisional payments mechanism that was approved by the
United Nations Joint
Staff Pension Board
at its 63rd session in 2016.
As the Committee members present at the 326th meeting, held 18 April 2018, could not reach consensus on whether the attached
document, prepared
by the Participants’ Representatives, should be presented, as submitted, under
the auspices of the Committee to the Pension Board,
the matter was put to a vote. At the
time
of voting seven members of the Committee were present and constituted the required quorum in
accordance with Rules of Procedure C.2 of the Fund.
The result of the vote was that majority of the members present
(4/7) were in favor of submitting
the document from the Committee
to the Board:
a)
In favor: four Participants’ Representatives (Ms. Mary Abu Rakabeh
(member); Mr. Ian
Richards (member); Ms Michelle Rockcliffe; and Mr. Ibrahima Faye (alternate));
b) Against: three members, two General
Assembly Representatives (Mr. Thomas Repasch and Mr. Jörg Stosberg) and one
Secretary-General’s Representative (Ms.
Kathryn Alford (alternate)).
Background:
At the 63rd Pension Board
Session in July 2016
the
Board considered
a Conference Room Paper
posed by the participants’
group that was intended to
reduce the negative effects of the backlog in Fund payments being experienced
for former
participants, by approving that the
it make a partial payment to certain retirees. It was confirmed
during the 64th Session
of the Pension Board that not a single individual had benefited from
the amendment. As can be seen
in paragraph 314 of A/71/9 the requirements
for making the provisional payments could have no effect since the
option still required that all documents be obtained prior to processing a benefit. In
fact, once all documents are received
and processed there would be no
reason for the Fund to make a partial
payment.
It was agreed in the SMC plenary that staff
and
management would offer an amendment to the text in order to correct the error and
would enable a partial
payment
to former staff, widows
and orphans while certain documents are delayed.
In the case of former
participants, this new text would
propose timely payment
of benefits including additionally,
to those former participants
who elect a withdrawal settlement. This would alleviate the hardship
inherent in separating from
full employment. For survivors,
partial payment
can possibly afford
those who are unable to provide certain legal documents
a means to afford them.
These measures
should remain in effect
until the Fund is able to implement the direct upload
of separation and other documents into IPAS the Employer Self
Service, and for
a period
not to exceed two years,
while it clears the
backlog.
Please note that
“double calculation of benefits” mentioned in paragraph 315 of A/71/9
is also unlikely in most cases, as calculation
would be done “as if” the
documents are received and a partial payment made. This
new proposal therefore mitigates
the need for resources
over
and above the current apportionment, especially when taking into
account the
lower vacancy rates
recently reported by the Fund versus
the vacancy rate
experienced
at the time of the original
proposal in 2016.
For ease of reference please find
attached
an
excerpt containing
the related text
from the A/71/9. Below are the suggested amendments
to the provisional payment options, including the option
to
make the provisional payment to staff entitled to withdrawal settlements since these
can represent
hundreds of cases
of staff who have found
themselves without work due to mission closures or downsizing. For example former staff
who separated since July 2017
are experiencing delays
in receipt of their withdrawal settlements.
Amended proposal
It is requested
that for cases
where Payment Instructions and
Separation Personnel
Action (SEPPA) have been
submitted to the Fund
but Separation Notification has yet
to be provided by the organization:
i)
For withdrawal
settlements and retirement requests where
a lump sum is requested,
the Fund should pay 80% contributions
reported and existing in the
participant’s account or
ii)
For retirement
or early retirement or disability where no lump sum is requested or applicable
pay
80% of the benefit due, retroactive to the
date of entitlement based
on the SEPPA.
iii)
Where payment
instructions exist for spouse
and orphan benefits
and the Fund is reasonably
sure as to the
entitlement of the claimant,
pay
50% (80%?) of benefit
due, retroactive to date
of entitlement.
Request to the UNSPC and Pension Board
In
view of the time which has
elapsed and the state of dire need
in most of these cases,
it should be requested
that the UNSPC take
up this matter right
away
so that a meeting of the
Standing Committee of the Pension Board be convened
to approve the amendments as soon as possible.
Provisional monthly payment option
314.
In the context of the review of the revised budget estimates, the Board requested the Secretary/Chief Executive Officer to propose measures in response to the request by the executive heads and the participants group for a provisional payment measure, as well as the suggestions contained in the conference
room paper (see para. 311 above) to accelerate and simplify
benefit
processing procedures. The Secretary/Chief Executive Officer considered that the adoption of a short-term measure to pay a provisional amount would alleviate some of the hardship being experienced by former participants. In that regard, the Board recognized that, in accordance with article 7(c) of the Regulations of the Fund, the Chief Executive Officer performs his functions under the authority of the Board and must certify for payment all benefits properly payable under the Regulations. The Chief Executive Officer proposed that the measure could be implemented in the following circumstances:
(a)
The provisional payment option would be available in exceptional cases and apply to monthly periodic benefits only. Such payment would be initiated in cases where the Fund had received all required documentation and the case was considered an “actionable case” in the workload database, but the Fund had not been able to process the benefit within three months from the date that all documentation had been received;
(b)
No payment would be made until the entitlement to a pension benefit under the Regulations of the Fund has been duly verified by the Fund;
(c)
The Fund would inform the former participant and his/her employing organization that all required documents had been received and that an advance payment would be made;
(d)
The Fund would also inform the former participant and the employing organization when his/her benefit has been reconciled and recalculated.
315.
The Board recognized that, while this measure would alleviate the hardship caused to former participants by the delays in receiving their pension benefits, it would entail significant additional work for the Fund. All s uch cases require at least double calculation of the benefits, reconciliation at the time of recalculation, reversal of accounting entries as well as possible questions and legal challenges in respect of foreign exchange fluctuations, cost of living adjust ments, etc. Moreover, it could have resource implications in the medium term (after 2017) depending on the implementation modalities and usage.
316.
In accordance with article 7(c) of the Regulations of the Fund, the Board authorized the Chief Executive Officer to implement a measure for provisional payment by early November 2016. The measure shall be applicable only to periodic benefits that have not been put into payment within three months of receipt of all documentation required for processing the benefit. The payment shall be limited to 80 per cent of the estimated monthly benefit payable.
317.
The Board noted that the measure would entail more work for the Fund secretariat and might require additional
resources. The Board
requested
that the Secretary/Chief Executive Officer submit a report to it at its sixty-fourth session on the implementation of the measure and usage, in order to determine the status and any resource implications.
70/260 16-13606
1.
During the 326th UNSPC meeting
senior management of
the
Fund Secretariat was invited to the meeting to discuss our
proposal, but
had
mostly negative reactions to the suggestion.
a)
First the legal officer stated that
there would need to be
a change in the Regulations to
Article 7(c) which states “The Chief Executive Officer shall perform that function under the authority of the Board and shall certify for payment all benefits
properly payable under these Regulations” [Emphasis added]
b)
The Head of
Geneva
office stated
that he was unsure if previous modalities to make
provisional payments were still
feasible after certain possible changes to IPAS
and
c) The Chief Operations officer listed
what she saw as a series of risks.
2.
At the meeting participants maintained that it
was not unnecessary
to
change the regulations in any
way to implement these
very
important procedures
to
alleviate the crisis
situation experienced by possibly
thousands
of
former United
Nations staff. The only risk in this
situation is to the retirees
and beneficiaries of
the Fund. Additionally there had been no changes to IPAS
that would prevent
implementation.
3.
Just after the 326th meeting it came to our attention that
management’s view of the process
might have been formed due to a
similar proposal made by
staff of the UNJSPF before go-live, where apparently the “provisional” payment process would entail a) running an estimate, b) basing a
provisional payment on the
estimated amount and then c)
setting up a receivable to be
cleared once the case was properly calculated, certified and
placed in payment.
4.
Please note
however
that the steps in paragraph 3 do not
make up the process being suggested
at this time. In fact the
proposal follows the complete “proper” establishment of the
benefit
payable.
5.
Please see the attached
page which
explains. There would also
be minimal additional
work
required to execute
payment
of balances as Business Intelligence
reports would show cases for
which outstanding documents had
arrived allowing
the balances of “Accounts Payable –On hold” payment
streams would then
be “established“ and paid with
a few clicks.
Processing of provisional (partial) payments
A. The current “ proper
payable” to be certified
in accordance with
Article 7(c) is processed as
follows.
Changes required for
partial (provisional) payments are
specified in RED
i)
Fund receives Separation Notification
(SEP/PENS E.4)(SKIP)
ii)
Fund receives Payment
Instructions (PI)
iii)
Separation Personal
Action (SEPPA) is retrieved by a PES calculator
upon receipt of PI
iv)
(SKIP) Calculator processes the case verifying information on the SEP/PENS E.4
against SEPPA
a. Note that the Personnel
Action (PA/SEPPA) is the
document
used
by the organization as the basis of payroll and therefore pensionable remuneration rates and pension contribution deductions are in line
with PA.
b. The SEPPA is also used
by organization’s finance section to (manually) prepare a SEP
(the organization’s promise to
pay) - after payroll clearance
– which is the process used
to ensure that no outstanding (money
nor
library books,
nor
keys) are owed to the organization.
v)
Calculator review Identification documents/ Birth & Marriage Certificates
vi)
Calculator/System uses
Grade
and
Step on Personnel Action (SEPPA) to verify
contributions
due to the Fund in accordance with Article 51
vii)
Verification of expected amounts then comparison (SKIP
comparison) with amounts on
SEP document
for
determination
of amounts owed to the
Fund.
viii)
Calculator reviews the election for withdrawal or retirement
benefit and calculates the
benefit
payable in accordance with Articles 28, 29, 30, 31, 33, 34,35, 36, etc.
ix)
Calculator updates a payment stream for 100% amount received from beneficiary
in line
with PI provided. (80% benefit payable for Withdrawal (WS)
or 1/3rd Lump sum in retirement cases)
x)
Payment stream for retroactive pension payable
is established for
retirement cases.
xi)
An additional payment stream is created but
“not established” for amount
amounts
found to be owed to the
Fund. (include 20% of
benefit payable (WS or 1/3rd )
xii)
Case is audited and
payment streams released
for
Certification.
xiii)
Case is Certified – in accordance with Article 7 (c)
xiv)
Finance processes
the
payment stream with banking instructions is “PAID” or
“In
Payment”
xv)
Amount on “not established” payment stream becomes “Accounts Payable-On Hold”
xvi)
Upon receipt of SEP (or other
missing document) “establish” and pay Accounts Payable- On Hold.
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