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=

Pension Fund: Next Certificate of Entitlement (Ce) to be sent in 2016

For information: Letter dated 12 October 2015 from the CEO, UNJSPF with cover email below to FAFICS/AFICS presidents and/or representatives (received via AFICS/NY on 19 November 2015):

Subject: Next Certificate of Entitlement (CE) to be sent in 2016


"Dear  FAFICS and AFICS presidents and/or representatives, 

Please find attached a self-explanatory note on the decision taken by the Fund to change the distribution cycle of the Certificate of Entitlement (CE) process. 

It would be very much appreciated if you could disseminate this information among your members. For your convenience we're sending you the note in English, French and Spanish."

Sergio B. Arvizú 
Chief Executive Officer, UNJSPF 
Tel: (212) 963-7041, e-mail: arvizu@un.org
Room DHP-3809Visit our website: www.unjspf.org 



See links to information notes in English, French, and Spanish below:

http://www.un.org/other/afics/documents/unjspf_2015_CE%20change%20of%20cycle%20note%20vers%204.pdf

http://www.un.org/other/afics/documents/unjspf_2015_CE%20change%20of%20cycle%20note%20vers%204%20French.pdf

http://www.un.org/other/afics/documents/unjspf_2015_CE%20change%20of%20cylce%20note%20vers%204%20Spanish.pdf

Pension matters: Make no mistake. The threat has abated but unreliable AFICS/NY leadership is still in place! 28 September 2015

Make no mistake. The threat may have abated temporarily, but the same unreliable AFICS/NY President and leadership are in place. We’re at an important juncture where every participant and beneficiary of the UN Pension Fund must take cognizance of the experience of the past year. 

For the first time in many years, we were faced with risks to the system of checks and balances that have kept our Fund safe and healthy for the past 65 years when others failed. The AFICS/NY President and Governing Board acted against the interest of AFICS members by supporting the draft MOU, dismissing our concerns about media reports about a move to riskier investments, and opposing at every turn the signing of a petition to the Secretary-General asking him to ensure that the system of checks and balances was maintained.

AFICS/NY President and Governing Board, letter of 23 September 2015: No shame!

28 September 2015

To: Ms. Linda Saputelli,  AFICS/NY President

Copy: AFICS/NY Governing Board

Dear Ms. Saputelli,

Subject: Request for an extraordinary meeting of the AFICS/NY Governing Board

We cannot fail to respond to your letter of 23 September 2015, which we consider an affront to all members of AFICS, who look to the Board for transparent, legitimate and honest representation

Concerning the request dated 12 June 2015 of 82 AFICS members, under the By-Laws, for a meeting on pension matters, we find it disturbing that following more than three months of correspondence containing a series of excuses, you now resort to a perverse interpretation of the AFICS By-Laws to justify non-compliance with its provisions. Since the Board includes several members with legal training and experience, it is indeed bizarre that the plain meaning of the statutes’ language has been so blatantly misused and contorted to satisfy yet a new excuse for not holding the requested General Meeting.  But it doesn’t require advanced legal training to understand that nothing in the By-Laws requires “individually signed requests.” By adopting this tactic you treat your dues-paying members with complete disrespect.

AFICS President to members: An expired 'President' doesn't have to follow By-Laws! 26 September 2015

Cartoon by Matthew Chip Bhima Hogan

Game changer: AFICS/NY President response to request for meeting under the Bylaws: Sorry, we changed the rules! No meeting -- and matter closed!

Game changer: AFICS/NY and Governing Board: a model of responsibility and accountability to its dues-paying members.

On 12 June 2015, 82 AFICS members sent a letter to the AFICS/NY President and Governing Board requesting a meeting on pension matters. In their first response (23 June) we heard about “legal and practical constraints” before a date and a formal agenda could be set; next (25 June) there were  “critical practical constraints and possible legal issues”; on 2 July, we had “the By-Laws do not impose a specific time-frame; then on 9 July, it was the MOU is on hold, there’s no rush; we can plan a proper meeting.  In the latest response, on 23 September, we have ‘rule change; we need individual signed letters by 50 members, plus we don’t know why you needed a meeting in the first place, and as far as we’re concerned, the matter is closed!" 

The AFICS/NY Governing Board has asked me to convey to you its reply to a message

received by the Board from Loraine Rickard-Martin on 17 September 2015.

We would first recall the background and the context in which you made your request for an

extraordinary meeting of the AFICS/NY membership. The day after the annual meeting of the

AFICS/NY Annual Assembly that was held on 4 June 2015, the Association’s Governing

Board received a request from you to convene soonest an extraordinary meeting of the

membership and citing Article 4, para. 3 of the AFICS/NY By-Laws. You followed it up on 12

June with a list that you stated was sent on behalf of 82 AFICS/NY members, some of whom

later indicated to AFICS/NY officers that they were not aware of having endorsed such a

request. Moreover, 8 are not AFICS/NY members. You insisted that the meeting should take

place before the 62nd session of the United Nations Joint Staff Pension Board, scheduled for

20-24 July 2015.