Budget Committee Approves Text on Staff Pension Fund, Stressing Need to Address Weaknesses in Financial Management
Also Discusses Financing of Peacekeeping Missions in Liberia, Côte d’Ivoire
With its approval today of a draft resolution on the United Nations pension system, the Fifth Committee (Administrative and Budgetary) asked the General Assembly to stress the need for United Nations Joint Staff Pension Fund managers to address all the weaknesses in the system identified by the Board of Auditors.
As laid out in the four-page resolution, those weaknesses related to financial management and financial statement disclosure, investment management, information system management and other administrative processes.
The Committee’s resolution also emphasized the importance of having the United Nations Joint Staff Pension Board issue financial rules to govern the Fund’s financial management. It asked for more information on that issue in the Pension Board’s next report.
Also by the text, the Assembly would emphasize the importance of the Fund meeting its annual real rate of return of 3.5 per cent over the long term as it welcomed the Fund’s improved actuarial position, which reversed the downward trend that began in 1999. The Secretary-General, as the Fund’s fiduciary, would be asked to keep diversifying its investments among developed, developing and emerging markets. If approved by the Assembly, the resolution also would encourage the Secretary-General to keep exploring investment prospects in all markets, always using sound risk management techniques.
As part of the Committee’s discussion on the financing of peacekeeping missions, which also took place today, Chandramouli Ramanathan, Officer-in-Charge of the Department of Management’s Office of Programme Planning, Budget and Accounts, introduced the Secretary-General’s documents on financing the United Nations Operation in Côte d’Ivoire (UNOCI) and the United Nations Mission in Liberia (UNMIL) for the 12-month period ending 30 June 2015. The estimated costs for the Organization’s peacekeeping operations in Côte d’Ivoire for the 2014/15 period were $490.7 million, down $2.9 million from the $493.6 million appropriated by the Assembly.
Several factors, including the Ebola virus outbreak, made it difficult to estimate the Liberian Mission’s resource requirements, Mr. Ramanathan said. Current projections indicated the Mission would use the entire $427.3 million appropriated by the Assembly for the 2014/15 period.
Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) introduced that body’s related reports. It was the Assembly’s decision to determine the required level of assessment for the two missions, he said.
The representative of Togo, speaking on behalf of the African Group, said it was unfortunate that the Committee had not concluded its discussion of peacekeeping financing issues in May of this year. Regarding the support of UNMIL and UNOCI for the United Nations Mission for Ebola Emergency Response (UNMEER), he expected the Secretary-General to produce clear, transparent and timely information on inter-mission cooperation arrangements and the recovery of related costs.
The representative of Côte d’Ivoire also spoke at today’s meeting.
The Committee will reconvene at 10 a.m. on Monday, 8 December to discuss the programme budget for 2014-2015 and the financing of peacekeeping missions, including the United Nations Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA) and the United Nations Mission in the Republic of South Sudan (UNMISS).
Financing of United Nations Peacekeeping Missions
CHANDRAMOULI RAMANATHAN, Officer-in-Charge, Office of Programme Planning, Budget and Accounts, introduced the Secretary-General’s notes “Financing arrangements for the United Nations Operation in Côte d’Ivoire (UNOCI) for the period from 1 July 2014 to 30 June 2015” (document A/69/534) and “Financing arrangements for the United Nations Mission in Liberia (UNMIL) for the period from 1 July 2014 to 30 June 2015” (document A/69/545) and a corrigendum (document Corr.1).
In regards to the Organization’s peacekeeping operations in Côte d’Ivoire, Mr. Ramanathan said the resource requirements for the 2014/15 period are estimated at $490.7 million, a decrease of $2.9 million — or 0.6 percent — from the $493.6 million appropriated by the Assembly for maintaining the Operation during the same period. Since the requirements were assessed only up to 31 December 2014, an additional assessment of $243.9 million was needed to fund its maintenance from 1 January to 30 June 2015. The reduced costs reflected a reduction of Government-provided personnel from 44 to 0, as of 30 September 2014, pursuant to Security Council resolution 2162 (2014) and fewer civilian personnel.
Turning to the financing of UNMIL, Mr. Ramanathan said the Council was to decide before year’s end on the extension of the mandate of UNMIL and whether troops and police would be drawn down. That factor and the Ebola virus outbreak meant the Mission’s final requirements for the financial year were difficult to estimate. Current projections meant the Mission would use the entire $427.3 million, appropriated by the Assembly in its resolution 68/291, to maintain the Mission for the 2014/15 period. Since requirements were previously assessed only up to 31 December 2014, an assessment of $213.63 million, which was within the $427.3 million, was requested for the 1 January to 30 June 2015 period. As the Mission would continue to minimize costs while carrying out its mandate and keeping staff secure, additional resources would be requested if necessary, once the final requirements had been determined.
CARLOS RUIZ MASSIEU, Chair, Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s related reports on financing of UNOCI and UNMIL (documents A/69/626 and A/69/627), respectively. He said that, considering that the Secretary-General was not proposing a revised budget for either of the two missions, it was up to the Assembly to determine the required level of assessment for them from 1 July 2014 to 30 June 2015. The Advisory Committee concluded that the Secretary-General should provide the most up-to-date information to the Assembly on both the actual and projected expenditures for the maintenance of those missions for that period.
Noting the support provided to the United Nations Mission for Ebola Emergency Response (UNMEER) by UNMIL, and by UNOCI on a somewhat reduced scale, he said the Advisory Committee understood that the sudden deployment of UNMEER required an expedited support. However, the costs of transferred resources should be charged to the receiving mission from the date of transfer and the sharing of resources by two missions should not lead to double budgeting and double assessment of Member States.
KODJOVI DOSSEH (Togo), speaking on behalf of the African Group, said it was unfortunate that the Committee was now discussing peacekeeping financing when the issue was to have been concluded in May 2014. The exceptional arrangements regarding assessments for six months, reached during the May session, did not set a precedent for the budgetary process. “The African Group will never subscribe to this kind of inefficient arrangement,” he said. Regarding financing of UNOCI, he noted that the additional assessment of $243.9 million reflected a shortage of $2.9 million in actual requirements needed for the first six months of 2015. The African Group was prepared to assess a remaining balance of $246.8 million from the approved resources, without any unnecessary delays. Turning to financing for UNMIL, he recalled that the Assembly had approved $427.3 million for the Mission’s maintenance and assessed $213.67 million for the period ending December 2014, an exceptional measure made without creating a precedent. The Ebola outbreak and other factors had created uncertainty regarding the drawdown of troops and police, and it was difficult to estimate the Mission’s actual requirements. The Mission’s projected requirements were now $439.2 million, an increase of $11.9 million — or 3 per cent — over the approved resources. The Group looked forward to discussing the financing details during informal consultations.
Regarding the support of UNMIL and UNOCI for UNMEER, he said the African Group agreed with the Advisory Committee that the sharing of assets between two missions should occur on a cost-sharing and cost-recovery basis. It was necessary to formalize an agreement on the support of UNMIL for UNMEER. He expected the Secretary-General would present clear, transparent and timely information on inter-mission cooperation arrangements, as well as the recovery of related costs, in future mission budget proposals and/or funding arrangements. The respective performance reports of both originating and receiving missions should also include that information. In addition, the African Group was frustrated that the peacekeeping financing reports were unnecessarily delayed.
FLORA CHRISTIANE SEKA-FOUAH (Côte d’Ivoire) said that the Assembly adopted resolution 68/285 on the financing of UNOCI for the period from July 2014 to 30 June 2015. But a resource arrangement was made for the six months ending 31 December contrary to normal practice. In the same resolution, the Assembly stressed that such a practice should neither set a precedent for the budgetary procedure nor compromise the Mission’s mandate. Her delegation trusted that resource arrangements would not negatively affect the delivery of the Mission’s mandate. The budget for a period from 1 January to 30 June 2015 was expected to be approved during the current session. Additional resources were crucial to continue supporting presidential and legislative elections in October and December 2015, political dialogue, national reconciliation, disarmament, demobilization and reintegration programmes, and security-sector reform in order to secure long-term stability in the nation.
Appointments on Committee on Contributions
Noting that Shigeki Sumi of Japan was to resign from the Committee on Contributions on 20 December, the Fifth Committee decided by acclamation to recommend to the Assembly the appointment of his compatriot Toshiro Ozawa for the remainder of his predecessor’s term through 31 December 2015. Mr. Ozawa’s curriculum vitae was annexed to the Secretary-General’s note on appointment of members of the Committee on Contributions (document A/69/102/Add.1).
United Nations Pension System: Action on Draft Resolution
The Fifth Committee then approved a draft resolution on the United Nations pension system (document A/C.5/69/L.6) without a vote, by which the Assembly would endorse the recommendations by the ACABQ set forth in document A/69/528.
Also by the text, the Assembly would emphasize the importance of the United Nations Joint Staff Pension Fund meeting its target annual real rate of return of 3.5 per cent over the long term, and welcome the improvement in the Fund’s actuarial position, which represented a reversal of the downward trend observed since 1999.
Further, the Assembly would stress the need for the Fund to address all the weaknesses identified by the Board of Auditors in relation to financial management and financial statement disclosure, investment management, information system management and other administrative processes. Approving some amendments to the Fund’s regulations and administrative rules and emphasizing the importance of the Board promulgating financial rules that would govern the financial management of the Fund, the Assembly would seek further information in the Board’s next report. Taking note of paragraph 36 of the Advisory Committee’s report, the Assembly would decide not to approve the proposed amendment to article 14 as set out in Annex XI to the Board’s report on the Fund’s financial statements.
The Assembly would also approve the amendment to reflect the 10 per cent adjustment to small pension threshold amounts for separations on or after 1 April 2016. Also, it would concur with the Board’s recommendation that the following assessments be discontinued: assessments of the costs of the April 1992 modification of the cost-of-living differential factors as applicable to the Professional and higher categories; of actual savings from the reduction of the 120 per cent cap provision to 110 per cent, effective for separations on 1 July 1995 or later; and of the costs and/or savings of the minimum guarantee at 80 per cent of the United States dollar track amount.
Noting with concern the Board’s observation regarding performance evaluations not having been completed for Fund staff for the cycle ended 31 March 2013, the Assembly would request the Secretary-General to continue his effort to ensure that the performance of all Fund staff members would be properly evaluated in a timely manner.
The Assembly would request the Secretary-General, as fiduciary for the Fund’s investment, to continue to diversify its investments between developed, developing and emerging markets, and to ensure that investment decisions in any country are implemented prudently, taking fully into account the four main criteria: safety, profitability, liquidity and convertibility, under volatile market conditions. It would also encourage the Secretary-General to continue to explore prospects in all markets, taking into account risk-return profiles and always applying sound risk management techniques.