The 188th meeting of the Standing Committee,
which meets every other year (when
the Pension Board is not in session), was held
in New York from 5 to 8 July 2005. The full
report of the Board can be found on the website
of the Pension Fund, www.unjspf.org.
FICSA, as observer, was well represented by
the FICSA President and the FAO participants’
representative, who is also a member
of the FICSA Executive Committee.
The following summary reports on several
key issues of interest to staff. Many of the
other items taken up by the Committee
involved housekeeping issues.
Purchase of additional years of contributory service: Staff opinion sought
Papers had been presented at earlier sessions
proposing that participants be able to
purchase additional years of contributory service.
At the present session, the Standing
Committee noted that participants would
need substantial financial resources to effect
the purchase of added years of contributory
service. As reflected in the Consulting Actuary’s
note reviewed at the session, such cost
would be in the order of 40% of pensionable
remuneration for each year purchased.
A number of representatives supported the
inclusion of the purchase of additional years
because it would support persons entering
the system at a later stage of their careers
and would be a useful recruitment tool. The
representative of the Executive Heads
requested that the Secretariat provide further
details as regards the cost of implementation.
The representative of the Governing Bodies
stated that while the Governing Bodies were
sympathetic to the idea, the cost of implementation
would be significant, and they
were reluctant to provide support at this
stage. A number of Participants’ representatives
expressed support.
The Standing Committee agreed that the
various staff associations could survey their
staff as to whether there was interest in such
a proposal. It agreed that the Board should
continue to review this possible measure at
its next session in 2006.
Impact of currency fluctuation on pension benefits
This item was considered on the basis of a
note prepared by the UNESCO Staff Pension
Committee. The note was motivated by concern
at the impact of recent currency fluctuations
on the local-track benefits paid under
the two-track pension adjustment system to
retirees with the same pension record but
separating from service at different dates.
The Standing Committee requested that
the problem be studied by the Fund secretariat and that a report, including possible remedies to minimize
certain negative impacts, be prepared for the Board session
in 2006.
Final average remuneration (FAR) methodology and early retirement protection measure
At its session in 2004, the Board considered a note by the Secretary/CEO prepared in follow up to previous reviews on the procedures
for determining FAR. The Board discussed possible alternative
means to redress aberrations in the levels of initial pensions and in
income replacement ratios over time in certain duty stations. The
Board reviewed a proposed solution to resolve the perceived problem,
whereby the participant’s initial pension would be guaranteed
not to be lower than what the Fund participant would have received
had he or she separated upon reaching the age of early retirement.
The Board had requested the Secretary/CEO to prepare, for this current
meeting of the Standing Committee, a study containing an actuarial
assessment of the proposed early retirement protection measure.
While some members of the Standing Committee were inclined to
support the proposed protection method, the Standing Committee
agreed that historical trends would need to be examined before
reaching any conclusions. The Standing Committee agreed that a
more comprehensive study would need to be considered by the
Board in 2006.
