Latest news from the General Assembly: Salaries and pensions under threat
Published on Thursday, 5 December 2013
Joint delegations of staff representatives from CCISUA and FICSA have been actively following developments in the Fifth Committee concerning the annual report of the International Civil Service Commission.
Following the continued freeze in the comparator on the one hand, and on the other hand the fact that the UN salaries are being compared more and more with the lowest earning segment of the US Federal Civil Service, the annual US/UN margin index has reached 119.6 and the 5-year average 115.7, slightly above the "desirable" level of 115.0. Due to this situation, and in order to avoid reaching the upper level of the margin at 120.0, the ICSC recommends a freeze as an automatic consequence of the margin management methodology.
However, in the opinion of some influential Member States, something has to be done immediately to move back the post adjustment index in New York to 115.
In simple terms, several Member States are advocating for an actual cut in salaries, not a freeze.
We are producing information to confute these argumentations on technical grounds, calling the attention of Member States on historical data showing that the 5-year average remained below the 115.0 level between 1995 and 2012 and no action was ever taken to rebalance the situation. It is unfair, to say the least, to call for "immediate action" as soon as the same threshold is surpassed by only 0.7 per cent. Moreover, historical data show that no comparable international organization has implemented salary cuts and no objective reason would justify a similar action in the UN, particularly when salaries have been moving within the parameters of the margin methodology established by the General Assembly.
Hence, our request: leave the margin methodology to be applied as it approaches the upper limit of 120 and let the ICSC monitor the movements over a period of time which could include also a larger span of time, such as a 7- or 10-year average. In the meantime, using the current comprehensive review of the compensation package as an opportunity to address the shortcomings of the margin methodology (staff representatives are also concerned that margin level is inflated by the absence of elements of compensation in the comparator's package. For example, the ICSC recently reported that " the current equivalencies with the Department of Veterans Affairs medical system need to be verified and the data relating to Department of Veterans Affairs physicians are not presently captured in the net remuneration margin" as they now have a new "special pay system" following many other occupational groups).
We are informed that the following text has been proposed by some Member States for inclusion in the draft resolution concerning the Pension Fund.
(…) 26. Notes paragraph 51 of the report of the Advisory Committee on the Administrative and Budgetary Questions and, in this regard, requests the Pension Fund to establish a mechanism to start tracking all withdrawal settlements paid to participants who separate with less than 5 years of contributory service and to provide this information to the General Assembly on an annual basis, starting from its sixty-ninth session;
27. Requests the Board to review at its next meeting the cost structure of the current system of benefits, including the appropriateness of the two-track system and the current mechanism of inflation compensation, in order to enhance inter-generational solidarity and further reduce the actuarial deficit of the Fund;
28. Considers it necessary to increase the participant's percentage rate contribution of his/her pensionable remuneration to 9.5 per cent and to decrease the employing member organization's contribution rate to 14.2 per cent, and invites the Pension Board to report on this issue no later than the main part of the sixty-ninth session of the General Assembly;(…)
These measures, which would substantially impact the purchasing power of salaries and pensions, do not originate from the Board's report or any immediate risk for the sustainability of the Fund. They are linked to the attempt to identify funds to cover the liabilities in the After Service Health Insurance, for which staff have no responsibility, and transfer the burden on the Pension Fund. Your staff representatives strongly oppose this attempt by some Member States to make these changes to our pension system that would affect staff at large.
In essence, some Member States are looking at ways to source money from the Pension Fund at the expense of staff and beneficiaries.
ICSC recommendation on MAS
Finally, the ICSC Recommendation on Mandatory Age of Separation at 65 for current staff seems to be kept on hold pending further clarification on the impact on rejuvenation and geographical distribution.
We will keep you informed of further developments from the General Assembly, where we will continue to advocate for the survival of what is left of the UN common system.