UN PENSION FUND"S ASSETS AT SOME $24 BILLION, FIFTH COMMITTEE TOLD

Press Release
GA/AB/3343

UN PENSION FUND’S ASSETS AT SOME $24 BILLION, FIFTH COMMITTEE TOLD

The assets of the United Nations Joint Staff Pension Fund’s had reached some $24 billion on 10 November, the Fifth Committee (Administrative and Budgetary) was told this morning, as it met to discuss the proposed administrative costs of that fund for the 2000-2001 biennium and revised estimates of those costs for the current 1998-1999 biennium.

It annually paid some $1.1 billion in benefits, the Chairman of the Standing Committee of the United Nations Joint Staff Pension Board, Suzanna Johnston, explained, and had 19 member organizations and more than 112,500 active members, participants and beneficiaries. Revised administrative costs for 1998-1999 were about $57.51 million, and she proposed costs of some $62.30 million for 2000-2001.

Although some costs increases were to be expected, the growth rate of the Fund’s budget was a concern and needed to be closely monitored, the representative of the United States told the Committee. Efforts to find the most favourable fee rate for the Fund must continue, she added.

The representative of Uganda asked the Fund’s Chief Executive Officer to ensure the Advisory Committee on Administrative and Budgetary Questions’ views on the Fund were properly considered.

C.S.M. Mselle, the Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s related report.

The Committee is scheduled to meet again at 10 a.m. on Friday, 19 November, to consider its agenda item on human resources management, to consider gratis personnel under its agenda item on reviewing the efficiency of the administrative and financial functioning of the United Nations, the programme budget implications arising from the recommendations of the International Civil Service Commission, and the revised estimates arising from resolutions and decisions of the Economic and Social Council.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to take up administrative expenses of the United Nations Joint Staff Pension Fund, as part of its consideration of the programme budget for the current 1998-1999 biennium and the proposed budget for 2000-2001.

The Committee had before it a report by the Secretary-General on the administrative and financial implications arising from the report of the Standing Committee of the United Nations Joint Staff Pension Board (document A/C.5/54/22). The report states that the Standing Committee’s report (summarized below) contains a number of recommendations that have implications for the budget of the United Nations. It identifies financial implications that would arise for the regular budget should the Assembly adopt the recommendations submitted to it in the report of the Standing Committee.

The additional requirements to the United Nations arising from the recommendations of the Standing Committee relate to staffing changes ($421,500) and computer and related costs ($146,300). Of the total additional requirements under staff costs, 39.5 per cent ($166,400) would be reimbursed by the United Nations Development Programme (UNDP), the United Nations Population Fund (UNFPA) and the United Nations Children’s Fund (UNICEF). The additional appropriation that would be required under the regular budget is thus estimated at $401,400 after recosting. An increase of $18,400 is also projected in the estimates of income from rental of premises.

It also had before it the report of the Standing Committee of the United Nations Joint Staff Pension Fund on the administrative expenses of the Fund (A/54/206). This contains general information on the Fund and its budgetary arrangements and the revised budget estimates for the biennium 1998-1999. Among the studies considered by the Standing Committee which impacted on the proposals for the proposed programme budget for the biennium 2000-2001 are: organizational and staffing structure of the Fund secretariat; enhancement of the role of the Geneva Office; Computer systems and operations -- enhancement and modernization; office space in New York and Geneva; delegation of personnel and procurement decisions to the Chief Executive Officer/Secretary; and outsourcing of local pension secretariat services to the Fund secretariat.

There are also sections on the Standing Committee’s review of the proposed programme budget for the biennium, the proposed budget for the biennium 2000-2001 as recommended by the Standing Committee and the Emergency Fund.

The Committee also had before it an addendum to the second report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on the Fund’s Administrative expenses of the (document A/54/7/Add.1). The ACABQ welcomes the inclusion of workload indicators in the Standing Committee’s report; in the future, it says, these statistics should be analytically linked to the request for resources.

It further recommends that efforts be made to streamline the report by having more focused and concise narratives and that a distinction be made between the functions carried out in New York and Geneva. It notes some imprecision in various categories of expenditure with regard to the recosted and current rates of the resource requirements for the biennium 2000-2001.

The ACABQ recommends that the appropriation for administrative expenses of the Fund be approved in the amounts of $57,514,000 for the biennium 1998-1999 and $62,301,100 for the biennium 2000-2001, taking into account a reduction of $23,800 for the exclusion of the reclassification of the post of database administrator to the P-5 level.

It states it has no objection to the proposal by the Standing Committee to supplement the voluntary contributions to the Emergency Fund by an amount not exceeding $200,000 for the biennium 2000-2001.

Statements

C.S.M. MSELLE, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s report.

SUZANNA JOHNSTON, Chairman of the Standing Committee of the United Nations Joint Staff Pension Board, said that because of the biennial work programme of the United Nations, the Pension Board met only every other year. Therefore, the Standing Committee had the responsibility to present the budget estimates of the Fund in odd-numbered years.

She drew attention to growth in size and scope of the operations of the Fund, of which there were currently 19 member organizations and more than 112,500 active members, participants and beneficiaries. The annual rate of increase in numbers of beneficiaries had increased by 4.7 per cent a year for the last 10 years, she said. On 10 November, the Fund’s assets had reached some $24 billion, and annual pay outs were currently some $1.1 billion per annum.

The administrative expenses of the Fund were separated into three components, she explained. These costs were either administrative in nature, or related to investment or audit.

The proposed revised estimates for 1998-1999 were about $57.51 million, she said, which was an increase of some $3.28 million over estimates approved last year. The increase was largely due to advisory and custodial fees, under contractual arrangements, which required some $2.56 million in new funds. Original estimates were based on projected market values which had proved lower than those realized.

Regarding budget estimates for 2000-2001, she said that the primary focus of discussion in the Standing Committee had been on additional resources requested for the establishment of six new posts, the reclassification of four exiting posts, and the level of advisory and custodial fees. A working group had been established to seek consensus, and its conclusions had been accepted by the Standing Committee. These conclusions were: acceptance of the non-post recommendations of the Fund’s Chief Executive Officer, approval of the six new posts but in the form of general temporary assistance, approval of three reclassifications which had been deemed reclassifiable by the Office of Human Resources Management; and conditional approval of the fourth reclassification pending Office of Human Resources Management determination that it was reclassifiable. This last reclassification was ultimately deemed not required, and therefore a reduction of some $23,800 should be made to the original estimates.

Accordingly, the proposed administrative costs for 2000-2001, chargeable to the Fund, would amount to some $62.30 million, she said. The Fund secretariat and the Board would pursue the studies suggested, and all other requests, of the ACABQ in future proposals. She sought approval of these two proposals, for 1998-1999 and for 2000-2001, as well as authorization to supplement the voluntary contributions to the Emergency Fund for 2000- 2001 by an amount not exceeding $200,000.

NESTER ODAGA-JALOMAYO (Uganda) said the presentation of the budget on this section was precise and straightforward. He felt the chief executive of the Fund would take the views of the Advisory Committee into account. He also supported the recommendations of the standing committee.

SUSAN SHEARHOUSE (United States) said that the rate of growth of the Fund’s budget remained a concern for her delegation. It would be unrealistic not to expect some increase, but this needed to be closely monitored. She sought assurances that continued efforts would be made to negotiate the most favourable fee rate for the Fund. She also sought clarification on the exact amount of the audit costs -- there was a lack of clarity on the implications of those costs for the regular budget.

Ms. JOHNSTON, Chairman of the Standing Committee, said she had noted, with appreciation, the statements made by Member States, and would be happy to provide additional information in informal consultations.

* *** *