Second open letter to the Representative of the Secretary-General, UNJSPF: Questions on the UN Pension Fund's investment performance, transparency and sustainability, 8 November 2023

Dear Mr. Guazo, 

 

I wrote to you on 16 October 2023 posing several questions about reported underperformance of the UN Pension Fund’s investments; the lack of investment reporting in the 2022 annual report; the low quality of investment reporting on the Fund’s website; the cause(s) of a high increase in the Fund’s funding ratio; and reported OIOS investigations of 15 Fund staff. 

http://unpension.blogspot.com/2023/10/open-letter-to-pedro-guazo.html

There has been no response from you. However, there have been developments as follows: your office, OIM (Office of Investment Management) posted detailed investment reports on the Fund’s website; OIM posted a “Positive performance” report on 3 November 2023, that includes links to two comparison reports (2021 and  2022).

Each of these developments raises more questions:

 

New investment reporting on the Fund’s website

 

On 18 October 2023, two days after my letter to you, OIM posted 13 pages of investment reports on the Fund’s website. 

https://www.unjspf.org/the-fund/historical-fund-performance/

 

This is information that should have been included in the 56-page annual report for 2022, which contains only two paragraphs on investment performance, on page 25. 

 

Questions:

 

Why were these investment reports posted on the website on 18 October not included in the 2022 annual report?

 

Will these detailed reports be a consistent feature on the Fund’s website and in annual reports in future?

 

Positive Performance newsletter

 

On 3 November, OIM released a newsletter titled “Positive performance of the Fund’s investment management just reconfirmed that includes a comparative performance with similar funds.”

 

https://www.unjspf.org/newsroom/positive-performance-of-our-funds-investments-just-reconfirmed/?fbclid=IwAR0pg3_Se5qZ2BGJK0JZhrtFdOuXEgjwlU5g6rXOGSmQkktgBUjfvhx-aJI

In the newsletter, OIM paraphrases and links to a 2022 CEM Benchmarking report (quote): “Your 5-year net total return was 4.2%. This was above both the Global median of 3.3% and the peer median of 3.9%.”

https://www.unjspf.org/wp-content/uploads/2023/11/CEM-Investment-Benchmarking-Analysis-DY2022-UNJSPF-public-release-Updated.pdf

Yet, the recent ACABQ report, A/78/7/Add.7, 24 October 2023);  paragraph 10, does not quote the 2022 CEM report. Rather, it quotes the CEM 2021 report as follows:  “the five-year net total return of the Fund was 11.3 per cent, which was above the global median of 10.4 per cent and equal to the peer median of 11.3 per cent”. 

https://www.unjspf.org/wp-content/uploads/2023/11/CEM-Investment-Benchmarking-Analysis-DY2022-UNJSPF-public-release-Updated.pdf

Questions:

Why does the recently published ACABQ report include (more favorable) information from the 2021 CEM comparative report rather than the 2022 report? 

 

Why was information from the 2021 and/or 2022 CEM comparative analysis not included in the 2022 Annual Report?

Further on this topic, the ACABQ notes in paragraph 12 of its report that “information on comparison with peers was included in the report on the investments of the Pension Fund (A/78/329, annex II to annex X).” A/78/329 is actually the symbol of the 2023 Pension Board report, not the report on investments, which is A/C.5/77/2 dated 17 August 2022, in which I am unable to find any mention of a comparison report .

Questions: 

Why is there no information on a comparison report in the 2022 investment report? 

Will there be information on a comparison report in the 2024 investment report, since these are only published every two years? 

Comparison report

 

Recall that my previous letter to you raised questions about a TUCS (Trust Universe Comparison Service)  comparative report showing “the fund is solidly in the bottom 25% compared to its peers and for 2022 came dangerously close to being in the bottom 5%”.

 

That the CEMS Benchmarking studies you share in the newsletter present a rather more positive picture of the Fund’s performance vis à vis its peers does not, in my view, invalidate the TUCS report. The Fund simply chooses to use a different metric. I continue to be interested in knowing your views on the TUCS report.

 

Questions: 

 

How does  CEMS compare with TUCS? For example,  what are the differences in the size of the respective universe of participants, and the specific pension funds and their market values, included in or excluded from,  the respective comparisons?

 

Specifically, were Swiss pension funds included in the CEMS comparison? I understand (but have been unable to verify) that a comparative study of Swiss pension funds in 2022 placed the UNJSPF near the bottom percentile. 

Value added

Quote from 2021 CEM report:  “Your 5-year net value added was 0.0%. This was below both the Global median of 0.4% and the peer median of 0.6%.  (See paragraph 10 (b) of the ACABQ report).

Quote from 2022 CEM report: “Your 5-year net value added was 0.0%. This was below both the Global median of 0.6% and the peer median of 1.0%. 

I understand “value added” to mean “an  increase in returns due to managerial decisions”. 

 

Question: 

 

To what factors do you attribute the Fund’s low value added by managerial decisions to investment performance? 

 

Investment terminology

The 2022 CEM  report states:  “Your 5-year net total return was 4.2%. This was above both the Global median of 3.3% and the peer median of 3.9%.”

The OIM  “Positive performance” newsletter  states: “The 5-year net total nominal return of the portfolio was 4.2%, surpassing both the global median of 3.3% and the peer median of 3.9.”

I understand “nominal” when related to investments to mean before adjusting for taxes and inflation. 

Questions:

What does “nominal” mean in the above context? 

Why isn’t the Fund’s terminology consistent so that its stakeholders may easily understand meaning?

Funding ratio

Recall my question about the cause(s) of the increase from 86% to 117% in funding ratio from 2011 to 2021 (page 33 of the annual report). Paragraph 8 of the 2022 ACABQ report, A/77/7/Add.10, 28 October 2022, notes that it is reported that the funding ratio  “ improved from 107.1 per cent as at 31 December 2019 to 117.0 per cent as at 31 December 2021, “owing to the good performance of the Fund in 2020 and 2021.”  

Question: 

Besides “good performance” what are the other causes of the curiously high increase in funding ratio over the past 10 years? See list of possibilities in my previous letter.

OIOS investigations of Fund staff

 

There has been no response to my question about the cause(s) of the OIOS investigation of 15 Fund staff (paragraph 109 of UN report A/78/301) including, reportedly, senior investment officers, and the possible impact on staff morale and performance, in the past, currently, and in future. 

 

Question:

 

Is retaliation against whistleblowers a factor in these investigations?

 

What are you doing to ensure that staff members under investigation receive due process?  

 

Investment performance

Some additional thoughts on investment performance.

Given that ‘median’ means midpoint”, i.e., half of participants were below that number, and half were above, the CEM results and the OIM newsletter appear to characterize the Fund’s performance as a contented average-performing fish swimming languidly in an average-sized pond.

What about the possibility of billions of dollars left in the market were the Fund to increase its performance to more than above the median?

Indeed,  the General Assembly consistently urges the Fund to improve its investment performance. As a recent example,  in paragraph 10 of its 2022 report, A/77/7/Add.10, 28 October 2022, the ACABQ “ notes the investment performance of the Fund for 2021 and encourages the Fund to continue its efforts to improve the performance of its investments” -- and that’s before investment performance decreased for 2022

Fund members’ right to ask questions and receive answers

 

You are aware that Fund members are in fact the owners of the Fund, and that as a public pension fund, the  Fund is subject to transparency and other standards. Members have a right to ask questions. The Secretary-General is the Fund’s fiduciary. You, as his representative, have obligations to the Fund’s stakeholders, to respond to questions, including about the Fund’s performance and sustainability. 

 

Fund members  have a right to ask questions and receive answers particularly given the Fund’s history of managerial and governance shortcomings as documented in various audits, and as mentioned in my letter, including investment audit, A/75/215, July 2020,  that found deficiencies in investment governance mechanisms, a “toxic” staff/management culture, and stressed the need for a “culture transformation programme to cultivate a harmonious, high-performing and ethical culture in the Office.” 

To be fair, that audit  was  performed before you assumed the position of RSG. Still, I am not aware of any available information about steps taken by you to improve governance and change the culture described in the audit. 

There is mention in paragraph 55 of the recent ACABQ report, concerning the OIOS investigations of Fund staff,  of a “culture implementation plan” and positive “leadership culture assessment” surveys. Plans and surveys are precursors to steps to bring about organizational change, they are not the actual transformational actions. 

Question: 

What concrete steps have you taken to effect a positive change in organizational culture, including staff/management relations?

Mosaic Governance report

 

In 2020, in response to a request by the General Assembly (A/Res/74/263, para 8) for an independent governance review of the Fund,  Mosaic Governance Advisors present a 200 page report that found significant variances regarding all the governance issues it reviewed, including how Pension Board members understood their fiduciary responsibility. 

 

Question: 

 

Which of these recommendations, if any, have been implemented since 2020?

 

Why self-representation 

One might ask why, given that there are  purported retiree representatives to the Pension Board, I choose to exercise personal advocacy including in bringing my concerns directly to you. My experience over a number of years is that the retiree organization (FAFICS) assigned that task, is a solid  part of the problem of non-transparency surrounding the Fund, including the Pension Board’s recent “ethics” guidelines that  impose extreme confidentiality requirements on its members with the result of quashing dissenting voices among staff representatives on the Board.    

I continue to await a response to the questions in my letter of 16 October and the additional questions I have posed here.  Whether or not you choose to respond directly, my interest is primarily in results; and there appear to be some results.

 

I will, therefore,  continue to publicize my questions in the hope of engaging your  attention and that of decision-makers for the purpose of obtaining results related to these issues that impact the Fund’s health and sustainability.

 

 

Yours sincerely,

Loraine Rickard-Martin, Beneficiary, UNJSPF

Admin, UN Pension Blog

 

c.c. Catherine Pollard, Under-Secretary-General  for Management Strategy, Policy and Compliance

       Courtenay Rattray, Chef de Cabinet, Office of the Secretary-General

 

“UN Pension Blog is rated among the 20 best Pension blogs [2023] from thousands of blogs on the web and ranked by traffic, social media followers & freshness.” https://blog.feedspot.com/pension_blogs/

 

 

 

Open letter to Pedro Guazo, Representative of the Secretary-General, UN Pension Fund: Questions on the Fund's investment performance, transparency and sustainability, 16 October 2023

 Dear Mr. Guazo, 

 

A recent analysis of the Fund’s performance and transparency in reporting compared with its peers, using publicly available information, has raised several issues of concern to Fund members.  There are also questions of concern regarding reported investigations and related morale and stability among Fund staff.

 

The  main finding regarding the Fund’s  performance in comparison to peers,  according to TUCS (Trust Universe Comparison Service), is that “the fund is solidly in the bottom 25% compared to its peers and for 2022 came dangerously close to being in the bottom 5%” (see table).

 

 https://www.wilshire.com/solutions/analytics/peer-analysis

 

Ajit Singh, former Chief Risk Officer, United Nations Joint Staff Pension Fund (UNJSPF),  described the methodology used for his analysis as follows:  Since the Fund does not provide annualized returns calculated for 3, 5 or 7 years, he “downloaded each year’s returns from 2013 to 2022 and [using the] GIPS approved geometric means approach, calculated 3, 5, 7 & 10 year returns and compared them to the TUCS universe of public pension plans over $5 billion, multi asset class and global footprint”. TUCS, he notes, “provides comprehensive information on the effects of risk, allocation and style and is widely used as a performance benchmark for US institutional assets."

 

He observes that for the ten-year period 2013 to 2022, starting with $44.6 billion and assuming no cash flow, a TUCS average peer performance of 8.15% annualized would have produced a market value of $97 billion instead of $80 billion produced by a below-average performance of 6.12%. Thus, the Fund's low performance "left about $17 billion in the market” that “could have meant substantially reduced contribution from employees", even arguing that with 117% overfunding the Fund does not need to take risks. 

 

He raises the following specific questions:  

 

Why does the Fund's 2022 annual report (page 6) provide information on 10 to 50 year returns and no information on 1,3,5,7 and 10 year annualized nominal returns, which he says is the industry standard and  “minimum for any pension fund report”? 

https://www.unjspf.org/wp-content/uploads/2023/08/Annual-Report-2022-final-version8.pdf

 

Why are the returns listed in a footnote as “real returns, not “nominal”, which he notes is “the industry standard for comparison”?

 

Why, where there is an asset management table (page 20), there is "no report of performance, long or short term, in comparison to peers, risk, tracking error, beta or omega"?

 

On page 24, why is “diversification” presented  in terms of geographical diversification instead of by correlation, tail correlations, marginal risk and other statistics?

 

On page 33, a chart shows that from 2011 to 2021 the Fund's funding ratio evolved from 86% to 117%. He notes that this is a 31% improvement that is surprising for a Fund which has been in the bottom 25% in terms of comparison with other public plans' investment performance for 10 years.

 

He asks what could be the possible causes for this “spectacular improvement” and whether a comparison of the 2011 and 2021 ALM (Assets and Liabilities Monitoring Committee) studies might point to such causes as:

 

Contributions from the UN increased a lot more than 23%

Early deaths (mortality rates used)

Quadrupling of salaries

Changes in accounting rules

Changes in methodology for smoothing amortization

 

Further, regarding transparency, he notes that it “took him some time to find yearly returns on the Fund's website” and compares investment reporting unfavorably with that of the Texas Teachers Fund, where the  annual report, page 118, includes a detailed and informative table. He suggests that the UNJSPF consult the website of peer public funds and use their reports as a guide for providing informative and transparent reports to its members.

https://www.trs.texas.gov/TRS%20Documents/acfr-2022.pdf?fbclid=IwAR2CMz8KWADjtrdj1LlwJjB4oXjR4akHjshnPonpwtLROivS-N9rwYCcOJc

 

He asks, given that the Fund “has access to the best experts globally and the IC [Investment Committee] is full of esteemed investment experts, [whether] the logical conclusion …is that the Fund is somehow not able to translate that wisdom into actionable implementation".

 

Finally, a question that's not directly related to the above analysis. Reportedly, several Fund staff, including senior investment officers, are under investigation by the UN's Office of Internal Oversight Services (OIOS). 

Paragraph 109 of UN report A/78/301, Activities of the OIOS, dated 9 August 2023, states: 

“During the reporting period, OIOS investigated multiple allegations implicating 15 staff members and 1 consultant related to the United Nations Joint Staff Pension Fund, in possible prohibited conduct, unauthorized disclosure of confidential information, failure to cooperate with authorized investigations, negligence and insubordination.” 

What are the causes of these investigations? Are they related to the OIOS investment audit A/75/215 (21 July 2020) that found shortcomings and made recommendations to strengthen the independence, transparency and accountability of various investment governance arrangements, including the short and long term performance of the Representative of the Secretary-General (RSG), investment reporting, and the management of conflicts of interest? 

Are the investigations related to events last year, when the Secretary-General, the Fund’s fiduciary, in response to pushback by members, suspended the planned external management of an additional portion of the Fund's investments? 

https://www.passblue.com/2022/04/28/further-outsourcing-of-86-billion-un-pension-fund-is-paused-and-questions-arise-about-russian-investments/

 

The investment audit also found (page 93) “divisiveness among staff and a culture that many staff described as “toxic”.” Has this “toxic” staff/management culture changed under your tenure as RSG, and if so, how? 

 

The reported OIOS investigations raise questions about retaliation against whistleblowers as a possible factor. Large-scale investigations of Fund staff, including senior investment officers, whatever the cause(s), have surely contributed to low staff morale and instability. 

 

As a long-time Fund member deeply concerned about issues of transparency and sustainability, I would appreciate your responses to these observations and  questions, including any factors the performance analysis may have failed to take into account, and how instability and staff morale owing to reported investigations of senior investment staff of the Fund might already have impacted, and may further impact, investment performance and the Fund's sustainability. 

 

In view of the imminent meeting of the Administrative and Budgetary(ACABQ)/Fifth Committee of the United Nations General Assembly and its discussion of pension matters (9 November 2023), I would appreciate receiving your response as soon as possible.

 

Thank you for your attention.

 

Yours sincerely,

Loraine Rickard-Martin, Beneficiary, UNJSPF

Admin, UN Pension Blog

 

c.c. Catherine Pollard, Under-Secretary-General  for Management Strategy, Policy and Compliance

       Courtenay Rattray, Chef de Cabinet, Office of the Secretary-General

 

“UN Pension Blog is rated among the 20 best Pension blogs [2023] from thousands of blogs on the web and ranked by traffic, social media followers & freshness.” https://blog.feedspot.com/pension_blogs/

 

 

The UN: Cracking down on whistleblowers again?

 

Last June,  the BBC aired a documentary on the plight of whistleblowers in the UN, titled “The Whistleblowers: Inside the UN”,  in which several former UN staff gave harrowing accounts of mistreatment after reporting on wrongdoing in the organization. https://www.bbcselect.com/watch/the-whistleblowers-inside-the-un/

 

Now the UN Administration appears to be at it again. Several senior staff of the UN Pension Fund’s Office of Investment Management (OIM) as well as a number of UN auditors were reportedly ordered in May to hand over their laptops and cellphones to the UN's internal oversight office (OIOS).

 

And last month,  the UN Administration reportedly asked, in writing, a former staff member/ staff representative  of  the Fund to comment on a complaint of defamation and harassment filed by former Pension Fund Chief Executive Officer,  Sergio Arvizu, against seven UN staff representatives. The complaint  relates to alleged events prior to Arvizu’s separation with a disability award from the UN in January 2019. Similar requests for comment are likely to be issued to other former and current staff representatives cited in the complaint.

 

The question of motive

OIM staff and auditors

It’s apparent that the investigation of OIM staff and auditors relates to the investment governance audit conducted in 2020 (A/75/215, 21 July 2020) that  found serious governance shortcomings, including divisiveness and a toxic culture among staff; a concentration of power that fostered perceived or actual conflicts of interest; a lack of detailed disclosure and recusal procedures; and procurement irregularities involving “Entity A”  that  may be hired as an external manager for part of the Fund’s Fixed Income portfolio.  Former head of investments, Sudhir Rajkumar left the UN three months prior to publication of the audit for “personal and family reasons”.  

 

The  investigation of OIM staff likely also relates to the recent heated controversy involving a decision by the current head of OIM, Pedro Guazo, to outsource a significant portion of the Fund’s fixed income investments.The decision was met with a petition by staff to Secretary-General Guterres who placed the decision on hold. A downsized outsourcing plan followed, which still amounts to about $5billion being outsourced.  

https://www.passblue.com/2022/04/28/further-outsourcing-of-86-billion-un-pension-fund-is-paused-and-questions-arise-about-russian-investments/

Staff representatives

The reason for the “assessment” underway of UN staff representatives is a UN Administration decision not to investigate Arvizu’s  complaint filed in July 2019. The decision cited, correctly, the latitude, in comments and statements, afforded staff representatives and the requirement that the Administration refrain from interfering in their activities (UN Dispute Tribunal (UNDT) judgment 2020/211, December 2020).

But on 18 March 2022, the UN Appeals Tribunal rescinded the UNDT’s judgment and remanded back to the Administration to assess Arvizu’s complaint holding that it had failed to lawfully exercise its discretionary authority “by balancing … conflicting interests and freedoms…”(UNAT judgment 1231).   

An avoidable travesty

A key question is why the Administration, which made the right decision the first time around not to investigate the staff representatives, cited staff prerogatives only. A travesty could have been curtailed had the Administration presented even part  of the backstory in its response. Perhaps the Administration preferred to keep the lid on that can of worms?

 

The Administration could have cited an array of audits that found managerial deficiencies under Arvizu’s tenure, among them unprecedented and protracted delays in benefit processing;  findings that relate to conflicts of interest; and procurement irregularities  (2017/002; 2017/104; 2017/110; A/73/341). 

 

There are also related GA advisory body (ACABQ) reports, press releases containing statements of Member States (https://press.un.org/en/2017/gaab4261.doc.htm) and a series of General Assembly resolutions calling for reforms to address management and governance deficiencies reported in the audits.

 

Arvizu reportedly went on leave in August 2017 soon after he was informed of Guterres’ decision, on the recommendation of the Pension Board, to renew his contract for three instead of five years. Shortly thereafter he went on sick leave until January 2019 when he was separated from the UN with a disability award. Since then,  he has filed a string of compensation claims with the UN internal justice system (UNDT/2020/205; UNDT/2020/208; and the claim in question, 2022-UNAT-1231. (UNDT/UNAT judgments are publicly available).  

 

A series of ironies

It's noteworthy and ironic that the governance audit (A/73/341, paragraph 78) stated that the UN Ethics Office established that retaliation occurred in three cases of staff of the Fund Secretariat under Arvizu's tenure. 

It's particularly ironic that one of the staff, who is among the seven staff representatives that Arvizu cites in his complaint, recently won her case at the UNDT and was awarded two years' net salary -- a costly payout by the UN for managerial wrongdoing (2022-UNAT-1207). The UN Administration decided nine months after Arvizu's separation that it was not going to pursue the three established retaliation cases. 

  

Most ironic would be if the UN Administration follows through on punishing OIM staff and auditors acting on principle, or if it reverses its decision not to carry out an investigation of UN staff representatives who were dispatching their responsibilities to their constituents in safeguarding the Fund.

 

It’s not surprising that these actions by the UN Administration are aimed at staff representatives and auditors connected to the Fund.  The Fund management and Pension Board routinely call foul on the staff representatives to the Pension Board, and UN auditors, related to audits of activities on the administrative and investments sides of the Fund, and slow-walk reforms. 

 

In 2018, in response to the governance audit, the Pension board reported the internal auditors to the UN’s Independent Audit Advisory Committee (IAAC), apparently for unprofessionalism. That body found no justification for the complaint. 

https://www.passblue.com/2018/08/27/the-un-pension-fund-board-rejects-an-audit-of-its-work/, https://www.passblue.com/2020/11/12/the-75-billion-un-pension-fund-kicking-reforms-down-the-road/

It’s also noteworthy that Internal audits consistently call out deficiencies in values of integrity and ethics, and the lack of an appropriate “tone at the top” on both sides of the Fund (governance audit, Rec. 10, A/73/341, para. 78; investment governance audit, A/75/215, para. 93). 

It’s important too to note that the above events are happening in the context of growing secrecy and authoritarianism surrounding the Fund, and against the backdrop of a long history of unfair treatment of whistleblowers in the UN as the BBC documentary demonstrates.

In response to the BBC documentary, Transparency International points to "a long line of individuals who have complained of suffering retaliation for reporting abuses of power or malpractice at UN agencies" and again urges Secretary-General Guterres "to immediately order an independent inquiry and use his power to remedy the harm caused to UN staff who have already suffered for trying to do the right thing." https://www.transparency.org/en/press/un-whistleblower-exposé-independent-inquiry-urgent-reforms

The question on many minds is will Guterres heed the call or will the UN leadership continue to crack down on dedicated UN staff with the courage to do the right thing? 

 

 

UN Pension Fund: CCISUA withdraws from the Pension Board session under threat of discipline by immediate expulsion, 18 August 2022

On 23 July 2022, I wrote in an article titled “Increasing authoritarianism threatens the Fund's sustainability” http://unpension.blogspot.com/2022/07/un-pension-fund-increasing.html that the success of CCISUA’s (Coordinating Committee for International Staff Unions and Associations) efforts in pushing back against unnecessary outsourcing and externalization of the Fund’s investments had “triggered the ire of members of the Pension Board who launched a barefaced and characteristic attempt to silence and intimidate them”. 

Now CCISUA has issued a statement on its website, full text below and link here: https://www.ccisua.org/2022/08/18/statement-of-ccisua-at-the-72nd-session-of-the-un-joint-staff-pension-board/?, in which it notes an escalation of events. Facing a threat of expulsion from the board, CCISUA chose to withdraw from the recent session of the Pension Board, as it “does not believe that a culture of secrecy contributes to the effective governance of an $80 billion public pension fund…”

The statement’s confirmation of a growing culture of secrecy surrounding our Fund is disturbing on several levels. The report of an Ethics Adviser, who following a review, accused CCISUA of sharing confidential information.and when CCISUA responded that it had shared only information in the public domain, stated that “he was not required to seek [CCISUA’s] version of events and needed only to act on the facts initially provided”, should ring alarm bells!

In commending CCISUA for its principled stance regarding its constituents and the wider membership of the Pension Fund, we, active and retired UN staff, the owners of the Fund, must also face the implications of its report of further proposals to discipline and expel elected board members for “legitimately discussing or commenting on the Board’s decisions with their constituencies”, a move it rightly notes, “appears contrary to the UN’s culture of tolerance and risks undermining staff confidence in the Fund."

"Statement of CCISUA at the 72nd session of the UN Joint Staff Pension Board

Distinguished Members of the UN Joint Staff Pension Board,

27 July 2022

The Coordinating Committee of International Staff Unions and Associations represents 60,000 staff in the UN common system through 15 member unions. Among its responsibilities noted in its statutes is the requirement to “promote and safeguard the rights, interests and welfare of all staff of the United Nations System.”

For this reason, CCISUA supports a robust and effective UN Pension Fund, which for many staff provides their only form of retirement income. It has worked hard to bring staff concerns regarding their pensions to the attention of the Fund’s various supervisory instances, namely the Pension Board, to which CCISUA has been an observer, the UN Secretary-General, and the UN General Assembly.

Earlier this year CCISUA raised staff concerns regarding the outsourcing and externalisation of investment management, an issue directly under the responsibility of the Secretary-General. Those concerns were heard and acted on. We thank the Representative of the Secretary-General for Investments for his transparency and openness, both in his meetings with staff federations and directly with staff.

Yet, CCISUA is today being threatened with expulsion from the Board. Following a review, the Ethics Adviser has accused it of sharing confidential information. CCISUA pointed out, and is happy to provide evidence, that it was only sharing information already placed in the public domain during a global staff townhall by the Fund’s leadership. The Ethics Adviser replied to CCISUA that he would not change his conclusions on this matter as he was not required to seek its version of events and needed only to act on the facts initially provided.

CCISUA understands that this situation has led to further proposals that would see participants at the Pension Board, including elected members, disciplined with immediate expulsion for legitimately discussing or commenting on the Board’s decisions with their constituencies. CCISUA does not believe that a culture of secrecy contributes to the effective governance of an $80 billion public pension fund, particularly in these volatile times, nor that Board participants are able to carry out their work effectively if they must operate in fear of punishment. This appears contrary to the UN’s culture of tolerance and risks undermining staff confidence in the Fund.

CCISUA instead encourages the Fund to promote a spirit of transparency that allows Board members and observers to discuss, comment on and explain the Fund, in good

faith, with those that appointed or elected them. Scrutiny can contribute to further good decision-making.

CCISUA must now choose between staying at the Board, within the confines of secrecy that are being requested, or having the freedom to represent its staff in good faith in accordance with its statutes. It cannot now do both.

Its members have therefore chosen the second option. Following this statement, CCISUA will respectfully withdraw from the current, ongoing session of the Pension Board. In doing so, CCISUA wishes to emphasise its continuing support to the UN Pension Fund. This includes providing friendly and constructive criticism when necessary.

CCISUA hopes all the same that the Pension Board and General Assembly will ultimately decide on path of greater transparency in administering staff members’ pensions and asks the Board to reconsider its actions including policies restricting the freedom of speech of Pension Board participants and concomitant threats of expelling observers.

In friendliness and solidarity."

UN Pension Fund: Increasing authoritarianism threatens the Fund's sustainability, 23 July 2022

 Increasing authoritarianism threatens the Fund's sustainability

 

As the saying goes, sunlight is the best disinfectant. But for exposure to have an impact, the perpetrators must have a sense of shame. In the case of many of the people surrounding the UN Pension Fund, there’s no sign of it. The Fund is increasingly surrounded by people with an authoritarian bent. Add incompetence to the mix, and it’s a toxic brew that jeopardizes the Fund’s sustainability.

 

Thanks to the CCISUA (Coordinating Committee for International Staff Unions and Associations) leadership for standing up for the interests of Fund members and for their success in pushing back against unnecessary outsourcing of the Fund’s investments. Their advocacy has apparently triggered the ire of members of the Pension Board who launched a barefaced and characteristic attempt to silence and intimidate them. In the following two articles, read the exchange of letters between the Board Chair and the CCISUA President  and the commentary on the issue by Michelle Rockcliffe, CCISUA Adviser on Pension..

 

“UN Staff News: Updated information on the outsourcing of the fixed-income portfolio of the Pension Fund”

https://unogstaffunion.org/un-pension-fund-agrees-to-cut-back-on-outsourcing/?fbclid=IwAR0o7Y5D8gxUBGmyjQv9_BZ4r6LuBq_lY0PgMKhvRI4BnAb0Qy87YOUfbvU

“The UN Pension Board’s unethical Ethics Policy,” by Michelle Rockcliffe.

http://unpension.blogspot.com/2022/07/the-un-pension-boards-unethical-ethics.html

 

It’s a fact that self-interest, vindictiveness, and raw ambition have often characterized the actions of many surrounding our fund. Some are questioning what the thwarted ambitions of one of the Pension Bureau’s members, who fought unsuccessfully for the position of CCISUA president after her stint as president of the NY Staff Union, may have had to do with the Board’s assault on CCISUA for advocating for the interests of Fund members. Sadly, our interests as Fund members too often fall afoul of petty politics.

 

Michelle Rockcliffe also exposes shameless double-speak and non-transparency in the Fund’s sharing of outdated investment information on its website, in the following article: 

 

In “Is OIM Transparency Improving?”  

http://unpension.blogspot.com/2022/07/un-pension-fund-is-oim-investment.html

 

Further, in “Egregiousness, hubris, and a violation of the AFICS/NY-Bylaws” Michelle, recently elected to the membership of the AFICS/NY Governing Board, describes the refusal by the AFICS/NY (Association of Former International Civil Servants) governing board, in violation of its bylaws, to allow her to participate in its pension committee, while courting and hand-picking controversial persons (non governing board members!) to join the committee. It matters on many levels, not least because the AFICS/NY pension committee is a stepping stone to membership on the FAFICS delegation to the Pension Board.

http://unpension.blogspot.com/2022/07/un-pension-egregiousness-hubris-and.html

 

See article on the topic titled “What happens when rights are violated within the UN” published by The Citizen: 

https://www.thecitizen.in/gender/what-happens-when-rights-are-violated-within-the-un-286235?infinitescroll=1&fbclid=IwAR3T2guC2uHT9DvjXdonPSqq8DfNvPA3P61gKKCRHja5Ylde5b-rVApCWjQ

 

See also my recent article on the topic:

http://unpension.blogspot.com/2022/05/un-pension-fund-stacking-decks-11-may.html

 

I first made the call in 2019 for UN retirees to suspend paying membership dues in response to non-transparency and undemocratic practices of the purported retiree umbrella organization, FAFICS. The 25 per cent of retirees who are members of the 60 associations of FAFICS must withhold our membership dues until that organization which impacts the operations of all AFICS associations world-wide and wields undue influence on our pension, reforms its practices.

 Please keep informed on important pension issues by visiting the blog and sharing information widely with active and retired UN staff.

The UN Pension Board's unethical ethics policy, by Michelle Rockcliffe, 20 July 2022

Michelle Rockcliffe

July 20  · 

The UN Pension Board’s unethical Ethics Policy (see below)

The letter (Version 5 no less) https://unogstaffunion.org/wp-content/uploads/CCISUA-Letter.v5.pdf?fbclid=IwAR1T6ECEe0lKSIuGTlsvpDSsG1hGDyBXvslYfSKhPbn4tOUzyYRgslHcsmM sent by the Pension Board Chair to CCISUA at the behest of the “Bureau” - four (4) board members who make up a small contrived “elite” group of pension board members is evidence of the egregious plan to expel both observers and duly elected members who take seriously their fiduciary duty to their constituents and who express independent views. As stated in the CCISUA response, this is nothing less than censorship.

https://unogstaffunion.org/wp-content/uploads/2022-07-11-Letter-to-the-Pension-Board-Chair.pdf?fbclid=IwAR3j1X9iY600MEafYyIirYl8sbplccNobQe3Z3dokBk5XFQMzwLKjZd78s0

Similar to the ethics rules mentioned in the Chair’s letter, terms of reference of the Chair annexed to the Pension Board Regulations in 2020 and 2021 have been expressly created to censor and stifle debate in the Pension Board creating a 4 member Bureau who work closely with 3 non-defined “spokespersons” effectively reducing the Board to 7 members and stifling any dissenting voices. This is contrary to best practices in public pension funds where all board members have an equal voice.

Notably, the poorly defined confidentiality statement was a brainchild created between 2015/16 almost 70 years after the Fund was established, but clearly reflecting the authoritarian leaning of the pension administration from that point going forward.

If we the shareholders of the UNJSPF understand that pension board meetings should be attended by all stakeholders (participants, retirees, survivors and taxpayers) as is customary in our peer public pension funds, then we would realize how ludicrous this letter is. (Listen for just 6 minutes starting at minute 44:00 of this peer pension fund meeting)

It is about time that the GA makes a change and opens up Pension Board meetings to all stakeholders; then the Board might become more focused on substance instead of trying year after year how to make themselves the exclusive owners of what should be public information. 

Ethics Policy: https://www.unjspf.org/wp-content/plugins/pdfjs-viewer-shortcode/pdfjs/web/viewer.php?file=%2Fwp-content%2Fuploads%2F2022%2F05%2FUNJSPF-Regulations-Current.pdf&fbclid=IwAR3ScBjudIvDeGOagzFHcUsQ4q44y7zJbsIYNPy9yXPCv6X0reU7OqIOC2M#Appendix12

UN Pension Fund: Is (OIM) Investment Transparency Improving? by Michelle Rockcliffe. 18 July 2022

  

Michelle Rockcliffe

July 18   · 

IS OIM TRANSPARENCY IMPROVING?

At last! Today 18 July the UNJSPF front page was updated from reporting that the Market Value (MV) of the Fund was $ 91 Billion which was the value on 31st December 2021.

https://www.unjspf.org/?fbclid=IwAR1nI4xd3vimOospLRUCBrR074CnLukWCw5g9oRrvo_t8B5zX2lOmaqisr4

But still the MV currently displayed is $87 billion, the approximate value on 31 March 2022. Just wondering why the value wasn’t updated to $78 billion – which is the value as of 30 June 2022 according to the Investments page.

https://www.unjspf.org/the-fund/historical-fund-performance/?fbclid=IwAR18Uz1AMgiU36YpUCcPUoe0-2xqg4V29PfazVcYsUTJQolOTQOgGDBkYLM

At the writing of this post, while the display shows Investment Performance Versus Benchmark by Asset Class as of 31 March 2022 –clicking on the “Chart Data” reveals that the underlying data is as of September 2021.

Are we – the beneficiaries/shareholders- supposed to be satisfied with empty assurances that belie the actual information being posted?

Isn’t it time for the lack of transparency in our UNJSPF to be corrected? The promises began more than 2 years ago.