NEW PETITION: UN Staff Unions to Secretary-General: Replace UN Pension Fund CEO Sergio Arvizu!

Link to Petition:

https://www.change.org/p/ban-ki-moon-replace-un-pension-fund-ceo-sergio-arvizu-retirees-need-their-pensions-on-time?recruiter=200229246&utm_source=share_petition&utm_medium=copylink

"STAFF UNIONS PETITION: Staff retiring from UN organizations must now wait six months before receiving their first pension payment, putting thousands in financial penury. This follows the calamitous implementation of a new IT system at the UN joint staff pension fund. Its CEO, Sergio Arvizu has since last summer refused to acknowledge the severity of the problem nor propose adequate steps to deal with it. He also ignored advice that could have prevented the crisis in the first place. The fund urgently needs a new CEO.

Pension Fund: Power politics, understaffing and request for Board meeting declined. February 21, 2016

UN Pension Blog has recently received word that the unfilled posts related to the almost $2 million under-expenditure in staff and technology by the Fund in the last biennium are at the P level on the Investment side of the Fund (apparently there are 20 unfilled posts at the end of the 2014-2015 biennium. It's unclear that all 20 remain unfilled as of now and whether they're all indeed on the Investment side. Anyone who can shed light, please do). On hedge funds, the Fund's report to the Fifth Committee, A/70/325, notes on page 67: "By the end of 2015, the Fund expects to be committed to 30 to 40 private equity and hedge fund managers. An additional Investment Officer for Alternative Investments was approved and is being added to the team. A request for proposal to hire a hedge fund non-discretionary adviser will be published later in 2015." Does any of this mean the Fund is moving toward more or fewer riskier investments such as hedge funds? Again, anyone who can shed light, please do).

Kudos to CCISUA, FICSA and UNISERV for taking a stand! February 19, 2016

The Pension Fund saga continues. Just around this time in 2015, a group of concerned UN retirees initiated a petition to the UN Secretary-General, urging him not to accept a revised MOU pushed by the Fund CEO and to stop plans (reported in the media) by the Representative of the Secretary-General for Investments (RSG) for increased Fund investments in hedge funds, both of which posed potential risks to the health of the 65 year old Fund.

In total, 16,000 Fund participants and beneficiaries signed two petitions (13,000 signed the first petition, initiated in May 2014 by the UN Geneva Staff Union; and 3,000 signed the second, initiated by UN retirees in New York in May 2015) and in July 2015 the USG for Management, Yukio Takasu placed the revised MOU on hold.

In addition there were accusations of fraud against the Fund CEO accompanied by impassioned denials. Throughout the saga, the AFICS/FAFICS President has stalwartly protected the CEO’s rear guard, or ‘had his back’, as the saying goes, as well as dismissed retiree concerns about the MOU and possible riskier investments.

All the recent news has been about serious and protracted delays in processing pension payments for new retirees. Snippets of information have come from various sources. According to the Fund website, the problems are caused by delays in integrating technology and by inadequate documentation submitted by retirees or by their HR directors in the various agencies. The AFICS/FAFICS President strongly concurs, and says she’s doing everything to resolve the problem with the CEO.

Where do things stand now? Has the CEO given up on a new MOU? What is the status of staff/management relations in the Fund, and their impact on client servicing including the current serious processing delays? Why, as noted in the Fund’s last report to the Fifth Committee was there an under-expenditure in the 2014-2015 biennium of almost $2 million on staff and equipment and what impact has that had on the current inefficiencies in the Fund? Is what we're hearing correct --  that the unfilled posts are at the P level on the Investment side of the Fund, and that what are needed to address the backlog are support level posts, which have to be approved by the Pension Board?  What is the status with riskier investments? Does the fact that there are no further media reports mean those plans are on ice (along with the MOU)?

UN Pension Fund Soup, February 18, 2016

An incompetent Fund CEO, a foot-dragging Pension Board Chair, irritated HR directors, a self-interested and obsequious AFICS leadership – time to unpack the Pension Fund soup.

As indicated by the letter from CCISUA, FICSA and UNISERVE posted below today, the management of the Fund has been working strenuously, although not to face the issues and take steps to improve efficiencies at the Fund, but to distance itself from accountability while placing the responsibility elsewhere -- on integrating new technology and on incomplete documentation submissions by UN system executive offices (see link to its latest self-serving message below on the Fund’s website).

The letter from CCISUA, FICSA, and UNISERVE, addressed to the Members of the Pension Board and to the Executive Heads of the UN Common System Organizations provides a much needed reality check, stating clearly that mismanagement of the Fund is at the root of its inefficiencies in client servicing, and urging, among other proposals:

Message to UN Pension Board from CCISUA, FICSA and UNISERV: Step out of denial and take resolute action! February 18, 2016

Pension matters: Obfuscation on hedge funds and 'absolute return', November 29, 2015

Ob·fus·cate

ˈäbfəˌskāt/, verb

1. - render obscure, unclear, or unintelligible.

Pension matters update:

The draft Memorandum of Understanding with its potential risks to the system of checks and balances that has kept our Fund healthy for 65 years was placed in the deep freeze by the Under-Secretary-General for Management, Yukio Takasu, this past July and, hopefully, will remain safely on ice. Still, despite consistent and more frequent reporting in the media (see previous post titled 'Pension gaps remain while hedge funds gorge on fees'), it's unclear to what extent the reality of the pitfalls of riskier investments such as hedge funds has been taken on board by the Fund's investment decision-makers, i.e., the RSG, the Investments Committee, the Pension Board, or, for that matter, by the leadership of our UN retiree representative organization, AFICS. 

We're currently wading through the report of the Pension Board Chairman to the Fifth Committee (Nov. 10, 2015), and the Pension Fund's report to the GA (August 14, 2015) posted on the AFICS website (links below). 

The report is posted on the AFICS website with no comment.  We look forward to the day that the AFICS leadership might consider going a step further to provide some brief commentary on the most relevant sections of these, often specialized and technical, reports (206 pages long in this case) for the benefit of its membership.

Pension gaps remain while hedge funds gorge on fees, November 29, 2015

See recent media articles on the pitfalls of alternative investments such as hedge funds (links and excerpts below). The New York Times November 20, 2015 article was delivered on the same day by UN Pension Blog to the office of the Secretary-General's Representative for Investments (head of the Fund's Investment Management Division), with a cover note, for her 'consideration'.

THE NEW YORK TIMES:  November 20, 2015: 'Why Pension and Hedge Funds Don't Mix'

Excerpt: "Rosy promises about hedge fund returns can hurt future retiree pension plans. Year in and year out, public pension managers invest in hedge funds that promise market-beating returns. The stated aim is to narrow the gap between what the pensions have promised future retirees and the money available to meet those obligations. What happens instead is that the pension gaps remain while the hedge funds gorge on fees."

http://www.nytimes.com/2015/11/20/opinion/why-pensions-and-hedge-funds-dont-mix.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=