PENSION FUND ISSUES-PROPOSED AT AFICS MEETING

 

15 MAY 2016

PENSION FUND ISSUES-PROPOSED AT AFICS MEETING

The general meeting of Association of Former International Civil Servants (AFICS) on 19 May will be an occasion to raise various questions relating to the status and management of the Pension Fund. Following is one proposal for amendments which will be presented by Lowell Flanders, former head of the Staff Counsel. Others are also expected to contact as many AFICS members as possible living in the NY Metro area who may be attending the AFICS Annual meeting on 19 May:

Dear Former Colleagues and AFICS members,

Over the last year or so, with increasing assaults and threats to our pension savings, we have become increasingly concerned that AFICS is not well equipped, or oriented to act as a lobbying group to effectively protect our common interests. It is not at all clear, in fact, that AFICS was ever intended to be an organization that could mobilize its members for an extended struggle against those who may not have our best interests at heart. Nothing in the AFICS by-laws and rules of procedure provides confidence in democratic, transparent leadership and procedures, or in the role that many of us believe AFICS should play.

Pension Funds around the world have been under siege for quite a few years now, both in the private and public sectors. Many funds have been crippled by mismanagement and malfeasance. Until recently, the UN Pension Fund has been well managed, with conservative and stable returns on its investments. All of this changed in 2014 with the effort to merge the investment and administrative functions of the Fund into one unit. Efforts were also afoot for the fund to take on more risky investments in hedge funds and other questionable financial products. This came at a time when other large public pension funds were divesting themselves of such funds. It is ironic indeed that the UN is forging ahead along a path that others have already abandoned.

Worse still, there is clear evidence in two letters from the Pension Board Assets and Liabilities Monitoring Committee (11 Feb and 7 March) that the Investment Management Division is operating with weakened risk controls, transactions carried out without the proper signatures, plus a troubling statement by the RSG to the 4-5 Feb Committee meeting that "possible changes to the Fund's investment philosophy and approved UNJSPF risk appetite are being considered", which, the Committee states in its 7 March letter, it considers to pose unacceptable levels of risk.

Weakened risk controls in the Fund's Investment Management Division are only part of the picture. The Pension Board's Investment Committee is seriously weakened as well. Why did our Fund lose its highly respected Chair of the Investment Committee, Ivan Pictet in his sudden resignation last year? He cited 'overwork' in media reports. He had served the Committee for ten years, and had been its Chair for a year. By many accounts he had done an excellent job of maximizing returns on the Fund's investments, and by some accounts, he resigned not because of overwork, but because the RSG wanted to impose changes he found unacceptable. He has not been replaced. Instead, the Chair of the Investment Committee has been rotated by the RSG and the term of office for members decreased to one year.

Clearly, we are faced with a level of turmoil and threat to the Pension Fund that we have not seen in previous years. This points to a situation where retirees need to be better organized to confront these threats to the Fund by people who do not care what happens to us. If our complaint was only that AFICS had been somnolent in the face of such threats, perhaps we could make excuses and move on. When many of you signed a petition to call for a general meeting of AFICS, in accordance with the AFICS by-laws, to discuss these issues, your request was effectively dumped in the rubbish bin by the AFICS leadership.

To address these issues we have prepared a proposed revision of the AFICS by-laws and rules of procedure that seeks to clarify and re-formulate its purposes and to make election procedures more transparent and democratic.

Please have a look at the document below, which we hope to introduce for discussion at the forthcoming AFICS meeting. Proposed new text is in bold italics while deletions are indicated by a strikethrough (to open document as a pdf, click here):