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Despite the Mismanagement at Our Pension Fund, its Board is About to Reward its Management with More Autonomy Through New Financial Rules and More Senior Posts

In July 2015, the UN pension fund implemented a new system to calculate and pay benefits called IPAS. At the same time as turning it on, the previous system it replaced was turned off.

At the start, the fund failed to pay new retirees and from August onwards, only a small portion of those waiting. The result has been delays of up to six months for newly retiring staff, many of whom have no other income to keep them going while they wait.

When staff unions and organizations started raising strong concerns in February 2016, calling for an extraordinary meeting of the pension fund’s board, the chairman replied on the board’s behalf that:

“the bulk of the backlog will be practically eliminated by early June. The Fund will be returning shortly thereafter to processing times of between one and two months after receipt of all separation documentation and payment instructions and provided there are no documentation discrepancies… an extraordinary meeting of the Pension Board would be unnecessary and counterproductive.”

In early June, the Fund claimed that 97 percent of the payment backlog had been tackled. Under questioning from the staff unions, it then revised that figure downwards to 64 percent. Yet UN management itself has cast doubts on even that figure. It seems that either no-one knows or the true figure is being concealed.

The size and ongoing nature of the delays is surprising given the resources that were devoted to IPAS. The pension fund has no shortage of funds to deal with the crisis. Currently there is a healthy cash pile, which most recently was used to pay for a communications post at P-5 level. There also was no shortage of funds to commission PWC to produce a report that lauded the successful implementation of IPAS and asked for more posts, not at the junior level where the hard work is being done to reduce the payment backlog (and posts remained vacant during the crisis), but at P-5 and D-1 levels. Interestingly, the UN’s independent Office of Internal Oversight Services, which doesn’t rely on the pension fund’s money, has been strongly discouraged from conducting a similar review.

The conclusion here is that despite the resources at hand, the CEO and his team mismanaged the implementation.

At the same time, the investments of the pension fund have been shown to be wanting, which could in the future affect the its actuarial valuations. A recent internal report (https://www.ccisua.org/2016/07/14/worried-un-pension-fund-investing-money/) showed our pension fund to be outsourcing to banks and investing in arms and tobacco – hopefully not the same arms that are used to fire on UN staff in peacekeeping missions.

It is clear that the pension fund’s leadership has not been candid with the Board and other stakeholders. Yet despite this situation, the Board will be asked on 17 July at its meeting in Vienna to approve new financial rules (https://www.ccisua.org/wp-content/uploads/2016/07/N1340857.pdf), giving the pension fund significant autonomy from the UN. As the proposed financial rules were only distributed one week ago, many Board members have had little change to read it, understand its significance nor consult with their constituencies. Yet in line with past practice, it is likely on Monday 17 July that the Board will rubber-stamp these rules.

Similarly, the recommendations of the PWC report, also distributed late. The Board having had little opportunity to discuss its analysis, consider the long-term consequences of higher administrative costs. Yet the request for new senior posts will most likely be approved.

Thus starved of time to consider and analyse the proposals, the board of the pension fund will likely reward mismanagement with more powers and more posts. That sadly is how it works at the pension fund.

Once again, we encourage you to sign the petition to protect our pension fund.

Petition link: https://secure.avaaz.org/en/petition/The_Board_of_the_UN_Pension_Fund_and_SecretaryGeneral_Ban_Kimoon_Save_our_pension_fund/

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