15 FEBRUARY 2010


When we were all elated in January 1997 as Kofi Annan became the first U.N. Secretary General to rise from our ranks, a similarly elated executive officer of the Joint Staff Pension Fund (UNJSPF) had to deal with an unprecedented case. How to handle the pension arrangement?

Normally, when a staff member concludes the period of service, he or she would indicate a choice: either a farewell full lump sum, or a partial sum to be complemented by monthly salary-style payments for life. There was no indication what to do, particularly if your former senior colleague, as Director of Budget and Head of OHRM, who was fully acquainted with every angle of the rules and regulations had to end his regular staff member status to take over as Chief Administrative Officer.

Regardless of any legal exchanges, it will be very strange if Raymond Geary did not informally consult with his long-time distinguished former associate on how to handle the welcome development. Annan had entered U.N. service in 1965, that is, he had served for 32 years. Geary is a cheerful pleasant accommodating -- though very tough -- colleague. He prepared an "aide memoire" on 9 January putting forward a number of options. Five days later an unsigned draft was sent to the new Secretary General, a normal procedure when discretion is required, highlighting concerns about "perceived inconsistency" and "double dipping" -- that is, receiving a monthly pension payment while receiving a full salary -- and other financial entitlements -- of a U.N. Secretary General. He placed on record that he had discussed the matter with the Special Assistant. An official letter on 3 February informed Mr. Annan that "in accordance with the request made in your payment instructions, payment of the periodic benefits will be suspended during your tenure as Secretary General of the U.N." Four years later, a new executive officer, Mr. Cocheme, wrote to Mr. Annan on 21 December 2000, indicating that "suspension" was in accordance with article 40(a) of the Funds regulations that the benefits "are not payable to you."

In April 2008, four months after a successor took over, the outgoing Secretary General requested the Administrative Tribunal to rescind the UNJSPF's decision. The Tribunal considering case "1592 Annan" was composed of Sir Bob Hepple (of South Africa/U.K.) presiding. Justice Goh Joon Seng of Singapore, and Professor Brigitte Stern of Paris (Sorbonne) and Geneva International Institute, served as members. Tamara Shockley was the Executive Secretary. The presiding judge allowed two extensions for Mr. Annan to submit his case. Judgment no. 1495 ruled in his favour, "not without hesitation."

It is indicated in document AT/DEC/1495 dated 23 December 2009 that the "Applicant" denied receiving the aide memoire of 9 January, nor seeing the Draft note of 14 January, neither did he authorize his Special Assistant nor anyone else to discuss his pension entitlements, "a confidential matter." Similarly, his Special Assistant stated 15 March 2009 -- that is 12 years later -- that she had "no recollection of any such discussions or having seen any written documents." As to the letter of the new Fund chief on the official interpretation of "suspension," the Tribunal noted that the fact that he, that is Mr. Annan, did not respond inferred agreement. Although he now agrees that "prudence would have dictated a reply," he explained that a reason for not replying was "that it was well known" that his own interpretation was the direct opposite. (Well known to whom?!) Against that assumption, it was pointed out that Mr. Annan was a participant in the Fund for over 30 years (let alone being Budget Director and Personnel Chief) and "must have been well aware" of the word "suspension" applied under article 40. Had he intended a different meaning, it went on, he could have instructed "postponement" or "deferment" rather than suspension.

As in the Volcker report, the Tribunal judgment seemed well-considered, though very considerate.

There was a "conflict of evidence" between applicant and Fund; "no cross-examination to establish where the truth lies" (lies?!). The evidence was "circumstantial and finely-tuned between the two versions."

In resolving this "conflict of evidence," the Tribunal was guided by the principle that in complex matters relating to pensions "the Administration has to be extra careful." Moreover, it assured that "whenever reasonable, in its negotiations, the Fund makes assumptions and decisions that are favourable to the staff member."

There was a very substantial difference, the argument went on, between a temporary withholding (however prolonged -- like 10 years), of a sum otherwise due and, in effect, the abolition of the entitlement to receive it. Given the ambiguity of the case (the Secretary General was a former staff member), the decision was to have "a lesser rather than greater adverse effect on the rights of the staff members." Thus, the Fund "failed to act carefully and transparently in order to ensure that the consequences of the wording used by the Applicant in his Payment Instructions must be construed as having lesser than greater adverse effect." The Tribunal, "not without hesitation," found that the Fund failed to establish that the word "suspend" was used in the sense of forfeiture of periodic benefits."

That is why, the Tribunal explained, it ruled to rescind the Fund's action and ordered that "accumulated benefits to be paid at 8% interest as of 1 January 2007."

And that's how to suspend "suspend."