Генеральная конферeнция 34-я сессия, Париж 2007 г. 大会第三十四届会议, 巴黎,2007

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1 General Conference 34th session, Paris 2007 Conférence générale 34 e session, Paris 2007 Conferencia General 34 a reunión, París 2007 Генеральная конферeнция 34-я сессия, Париж 2007 г. א א א א א א ٢٠٠٧ 大会第三十四届会议, 巴黎, C 34 C/37 2 August 2007 Original: English Item of the provisional agenda UNITED NATIONS JOINT STAFF PENSION FUND AND APPOINTMENT OF MEMBER STATES REPRESENTATIVES TO THE UNESCO STAFF PENSION COMMITTEE FOR OUTLINE Source: Article 14(a) and 6(c) of the Regulations of the United Nations Joint Staff Pension Fund. Background: The United Nations Joint Staff Pension Fund was established in 1949 by a resolution of the United Nations General Assembly. UNESCO s participation agreement with the Pension Fund dates from 1 January As a member organization of the Pension Fund, UNESCO has a tripartite Staff Pension Committee which is composed of nine members and nine alternates, of whom one third are appointed by the General Conference, one third by the Director-General and one third by the Participants in the Pension Fund. Purpose: The purpose of this document is twofold. The first part deals with the report by the Director-General on the United Nations Joint Staff Pension Fund. The second concerns the designation of Member States representatives to the UNESCO Staff Pension Committee. Part I is submitted for information to the General Conference, in conformity with Article 14(a) mentioned above. It describes the main developments in the pension system since the Director-General s previous report made in 2005 at the 33rd session and gives a summary of the operations of the Fund during the financial year ended 31 December 2006, the investments of the Fund and its actuarial position. In Part II, the General Conference, in conformity with Article 6(c) mentioned above, is required to designate its representatives, consisting of three members and three alternates, to the UNESCO Staff Pension Committee for the period 1 January 2008 to 31 December Decision required: paragraph 28.

2 34 C/37 I. UNITED NATIONS JOINT STAFF PENSION FUND BACKGROUND 1. The United Nations Joint Staff Pension Fund (UNJSPF) was established in 1949 by a resolution of the United Nations General Assembly, to provide retirement, death, disability and related benefits for the staff upon cessation of their services with the United Nations and the other Organizations of the United Nations system participating in the Fund. UNESCO s participation agreement with the Pension Fund dates from January The participating organizations jointly administer the Fund through the United Nations Joint Staff Pension Board (UNJSPB), which consists of 33 members, representing the 22 participating organizations. This Board is a tripartite body whose members are as follows: (a) one third are elected by the General Assembly of the United Nations and the corresponding Governing Bodies of the other member organizations; (b) one third by the Executive Heads; and (c) one third are the elected representatives of the participants. 3. The General Assembly of the United Nations decides on changes in the Regulations governing the Pension Fund and in the pension adjustment system. The UNJSPB reports regularly to the United Nations General Assembly on the operations of the Fund and on the investment of its assets. It recommends when necessary amendments to the Regulations which govern, inter alia, the rates of contribution by the participants (currently 7.9% of their pensionable remuneration) and by the organizations (twice the foregoing amount, i.e. 15.8% of pensionable remuneration of participants), eligibility for participation and the benefits to which participants and their dependants may become entitled. 4. This part of the present report is submitted for information to the General Conference in accordance with Article 14(a) of the Regulations of the United Nations Joint Staff Pension Fund which provides that: The Board shall present to the General Assembly and to the member organizations, at least once every two years, a report, including a balance sheet, on the operations of the Fund, and shall inform each member organization of any action taken by the General Assembly upon the report. 5. Due to the biennialization of the work of the Fifth Committee of the General Assembly, the United Nations pension system is now considered by the Assembly only in even-numbered years (i.e. non-budget years). 6. Since the Director-General s report to the General Conference at its 33rd session in October 2005 (33 C/37), the Pension Board has submitted one report to the General Assembly in 2007, covering its 53rd session. OPERATIONS OF THE FUND 7. The operations of the Fund during the financial year ended 31 December 2006 are summarized as follows: Financial overview 8. The number of Fund participants as at 31 December 2005 was 93,683 (64,092 from United Nations organizations and 29,591 from specialized agencies). It increased by 9.9% during the biennium, as against 6.4% during the biennium. Of the total participants, 55,743 (59.5%) were serviced by the New York Office, and 37,940 (40.5%) by the Geneva Office. The Fund acts as the Staff Pension Committee, administering the participation and separation of staff for the United Nations Secretariat and some participating organizations.

3 34 C/37 page 2 9. The number of periodic benefits granted for the biennium was 55,140 compared to 52,496 for the previous biennium (a 5.0% increase). It included 17,992 retirement benefits, 12,392 early and 6,656 deferred retirement benefits, 8,363 widow s and widower s benefits and 8,120 children s benefits, 1,015 disability benefits, 560 widow benefits and 42 second dependant benefits. 10. The market value of the investment portfolio of the Fund as at 31 December 2005 increased by $5.7 billion (22.0%) to $31.4 billion, as against $25.7 billion. INVESTMENTS OF THE FUND 11. As of 31 March 2006 the normal reporting date used in the reports of the representative of the Secretary-General for the investments of the Fund to the Pension Board the market value of the assets stood at $33,118 million, as against $29,252 million as of March 2005, an increase of 13.2%. The total investment return for the year ending 31 March 2006 shows a real rate of return of 9.6%. 12. Considering that the retirement and other related benefits of the United Nations pension system are secured through the assets of the Fund, the long-term investment objectives of the Fund are, first, to preserve the principal of the Fund and secondly, to obtain an optimal investment return while avoiding undue risk. The management of the Fund s investments is geared to maintaining a careful balance between risk and reward expectations over the medium- to longterm, rather than taking the risk inherent in seeking very high short-term returns. All funds are invested according to specific criteria of safety, profitability, liquidity and convertibility. ACTUARIAL POSITION OF THE FUND AS AT 31 DECEMBER Actuarial valuations are undertaken every two years to determine whether the present and estimated future assets of the Fund will be sufficient to meet its present and estimated future liabilities, using various sets of assumptions as to future economic and demographic developments. 14. The Regular Valuation, as at 31 December 2005, revealed a fifth consecutive surplus, amounting to 1.29% of pensionable remuneration. The four previous valuations, those as 31 December 2003, 31 December 2001, 31 December 1999 and 31 December 1997 had revealed surpluses of 1.14, 2.92, 4.25 and 0.36% of pensionable remuneration, respectively. The primary purpose of such valuations, undertaken every two years, is to determine whether the present and estimated future assets of the Fund will be sufficient to meet its present and future liabilities, using various actuarial assumptions as to future economic and demographic developments. The current surplus of 1.29% means that the theoretical balance between long-term liabilities and the Fund s financial resources was 22.41% of pensionable remuneration against the actual contribution rate of 23.70%. 15. With respect to its liabilities on 31 December 2005, the Fund was found to be in a strongly funded position, as it has been for the past eight valuations. The current funded ratio is 139.9%, which was obtained by dividing the actuarial value of assets (i.e. $27,878.3 million) by the actuarial value of the accrued benefits (i.e. $19,922.3 million). The ratio therefore indicates there is a 39.9% security margin. The funded ratio is lower if account is taken of the current system of pension adjustments, whereby benefits are adjusted for inflation. OTHER DEVELOPMENTS Investment Management Arrangements 16. Investment management arrangements were widely considered during the last session of the Board. Noting that the Board had endorsed the intention to manage the Fund s North American

4 34 C/37 page 3 equities portfolio through an indexation policy, the General Assembly approved all the funding requested to implement the decision. Change made in the Regulation 17. Following the improvement in the actuarial situation of the Fund, the Board made a recommendation to reverse some of the economy measures that had been implemented in the 1980s when the Fund was experiencing a serious actuarial deficit. Accordingly, in accordance with General Assembly resolution A/RES/61/240 the following measures were approved with effect from 1 April The first measure will eliminate the limitation on the right to restoration for existing and future participants based on the length of the prior contributory service. Any participant in active service who entered the Fund before 1 April 2007 and who has been previously ineligible to restore prior contributory service as a result of the length of such prior service, may now do so under certain conditions. 19. The second measure approved by the General Assembly concerns the UNJSPF pension adjustment system. As from 1 April 2007, the current reduction in the consumer price index adjustment due to benefits in award shall be reduced from 1.0% to 0.5%. In addition, a 0.5% increase will be applied on the occasion of the next adjustment to the benefits in payment to existing retirees and other beneficiaries who have previously had 1.0% reduction applied to their benefits. Revised budget estimates for the biennium 20. The General Assembly also approved additional resources relating to the biennium The increase is primarily related to investment costs authorized to enhance the Investment Management Service of the Fund. The additional resources will also cover implementation cost for changes to the Regulations and Pension Adjustment System and increased audit costs including the cost related to the new Audit Committee established by the Board to provide better communication channels between the internal auditors, the external auditors and the Pension Board. UNESCO Controller was elected by the Board of the Fund to participate in this committee and subsequently he has been the chairman of the committee. We are very pleased that UNESCO is playing a leadership role in bringing better communication within and outside the Fund s organization. Transfer agreements 21. The Pension Board approved, and the General Assembly concurred with, the revised UNJSPF-World Bank Group Transfer Agreement and with separate Transfer Agreement between the UNJSPF and each of the six Coordinated Organizations. All transfer agreements will take effect as from 1 January II. UNESCO STAFF PENSION COMMITTEE 22. In fulfilment of its obligations under the Regulations and Rules of the United Nations Joint Staff Pension Fund, the UNESCO Staff Pension Committee holds its meetings at the Headquarters of the Organization in Paris. Such meetings, which normally last half a day, are called as required. On average, four or five meetings are held each year. The Committee is composed of nine members: three members (and three alternates) elected by the General Conference of UNESCO for a period of two years; three members (and three alternates) appointed by the Director-General. They must be affiliated to the Pension Fund and be members of the UNESCO Secretariat; three members (and three alternates) elected, by staff members.

5 34 C/37 page The UNESCO Staff Pension Committee is the administrative organ within UNESCO of the United Nations Joint Staff Pension Fund. The latter was established by the General Assembly of the United Nations to provide retirement and related benefits for staff serving with the organizations of the United Nations system. The United Nations Joint Staff Pension Fund is administered by a Tripartite Board, which has delegated to the Staff Pension Committee of each member organization authority to deal with most of the matters that are likely to arise in relation to the Fund s administration. Thus, the authority of the UNESCO Staff Pension Committee extends to the following matters: (i) granting of benefits under the Pension Fund Regulations to UNESCO participants and beneficiaries; (ii) interpreting and applying the Pension Fund Regulations and Administrative Rules in respect of UNESCO cases; (iii) proposing amendments to Regulations and Rules of the Fund for consideration by the Joint Staff Pension Board and subsequent submission to the General Assembly of the United Nations, which is the legislating body on pension matters; (iv) participating, through its designated representatives in the regular and special sessions of the Joint Staff Pension Board and its subsidiary organs. 24. With regard to the rules governing the election of its representatives to the local Pension Committee, the General Conference has hitherto followed the practice of appointing Member States as members and alternates which in turn designate their representatives for the Committee. To avoid delaying the meetings and incurring unnecessary travel expenses, the General Conference has also tended to choose Member States which have permanent delegations to UNESCO in Paris, so that such States may designate their representatives from the staff of their permanent delegations based in Paris. It is an advantage if the representatives were bilingual in English and French since there is no budget provision for translation or interpretation costs. 25. The General Conference has also introduced the practice of appointing its representatives to the UNESCO Staff Pension Committee for a term of office corresponding to the interval between regular sessions of the Conference, namely for two years. As stipulated in the Regulations of the Fund, Committee members and alternates are eligible for re-election. 26. Further to 33 C/Resolution 72, the representatives of the following Member States have served on the UNESCO Staff Pension Committee for the period : As members Malaysia Peru Tunisia As alternates Czech Republic Ethiopia Luxembourg 27. The General Conference, as indicated by its past designations of representatives to the Committee, recognizes the need for some degree of continuity and experience in the administration of the Fund. This need is particularly felt today since the Pension Fund which serves the United Nations as a whole has grown from a relatively simple system to a highly complex one, governed by provisions which are often complex and difficult to understand. It would facilitate the process if the regional groups of Member States could consult in advance within the group for consideration of this item on the agenda of the Administrative Commission, in order to designate Member States for proposed appointment to the Committee. DECISION 28. Taking the foregoing considerations into account, the General Conference may wish to complete and adopt the following draft resolution along the following lines:

6 34 C/37 page 5 The General Conference, 1. Having examined document 34 C/37, 2. Takes note of the report by the Director-General on the United Nations Joint Staff Pension Fund, 3. Appoints the representatives of the following six Member States to the UNESCO Staff Pension Committee for the period from 1 January 2008 to 31 December 2009: As members As alternates Printed on recycled paper

7 General Conference 34th session, Paris 2007 Conférence générale 34 e session, Paris 2007 Conferencia General 34 a reunión, París 2007 Генеральная конферeнция 34-я сессия, Париж 2007 г. א א א א א א ٢٠٠٧ 大会第三十四届会议, 巴黎, C 34 C/37 Add. 11 October 2007 Original: French Item of the provisional agenda REPORT BY THE DIRECTOR-GENERAL ON THE STATE OF THE UNITED NATIONS JOINT STAFF PENSION FUND FOR THE BIENNIUM ADDENDUM COMMENTS OF THE INTERNATIONAL STAFF ASSOCIATION OF UNESCO (ISAU) OUTLINE In accordance with Item of the Administrative Manual, the International Staff Association of UNESCO (ISAU) presents its own comments on the report by the Director-General. 1. The International Staff Association of UNESCO notes that the number of members is constantly increasing and grew by approximately 10% for the biennium. The capitalization of assets as at 31 December 2005 showed growth of more than 20% over the previous period. Recent figures show assets of US $33,118 million as at 31 March 2005, with a net rate of return on investments of close to 10% compared to the previous financial year. 2. The actuarial analysis shows sound long-term health: the Fund s present and estimated future assets are sufficient to meet its present and future liabilities. For the last eight actuarial valuations the returns have been positive and satisfactory. Following the improvement in the actuarial position, a number of restrictive measures taken in the 1980s when the Fund s actuarial position was weak, have been abolished. We are pleased to note this improved performance.

8 34 C/37 Add. page 2 3. In an economic climate characterized by the steady deterioration in the exchange rate of the US Dollar against the Euro, it is a matter of regret that this question, which affects the lives of large numbers of our former colleagues and of those in active service who will shortly reach the statutory retirement age, was not given the attention it deserved at the last Assembly of the Fund. We are hopeful of a positive outcome when this question is discussed again, at the next session of the Assembly of the Pension Fund in Rome in July In the absence of any overall investment strategy for the Fund, in an unstable financial environment, especially in the United States, the haste with which the Fund s investment managers decided to manage its American stock market investments externally, and the inadequacy of communication on this by the Fund, continue to give cause for concern among the representatives of the participants. Printed on recycled paper