The United Nations Joint Staff Pension Board held its 76th session virtually on 21-22 February 2024. Below is a summary of the main issues discussed and decisions taken.
Election of new Chair, Vice-Chairs and Rapporteur
The Board elected Ms. Patricia Nemeth (representative of the Participants of the United Nations) as Chair, Mr. George Sarpong (representative of the Governing Body of UNESCO) and Mr. Arnab Roy (representative of the United Nations Secretary-General) as first and second Vice-Chairs, and Mr. John Levins (representative of the Participants of the Food and Agriculture Organization /World Food Programme) as Rapporteur for the year 2024.
Performance of the Fund
The Chief Executive of Pension Administration, Rosemarie McClean, noted that this year the Fund celebrates its 75th anniversary. She reported that the Fund had outperformed its benchmark in 2023 with a 92.8 per cent processing rate within 15 business days of receiving all necessary documentation of benchmark benefits and that more than 30,000 retirees and beneficiaries have issued their Certificate of Entitlement using the Digital Certificate of Entitlement app. The Fund met its payroll commitments and is continuing to make its best efforts to assist in the payment disruptions of Sudan and Russian Federation, as well as working closely with the United Nations to continue to improve processing of separations. Ms. McClean noted that the Fund continues to build its outreach efforts, including new monthly pension townhall sessions that began this January. From a planning perspective, she noted that the Fund will continue to build on its accomplishments from 2021 by focusing on the modernization of the aging pension administration system and she presented a short, medium and long-term road map to accomplish this. The Chief Executive also highlighted that the priority for 2024 was implementing the UNJSPF Connect, the new customer relationship management system.
The Representative of the Secretary-General for the investment of the assets of the Fund (RSG), Pedro Guazo, reported on the progress made by the Office of Investment Management (OIM). He informed the Board that as of 31 December 2023, the portfolio was valued at USD 88.18 billion, compared to USD 77.92 billion as of 31 December 2022. The Fund has been performing well with a real rate of return of 4.8 per cent over the 15-year long-term period ending December 31, 2023, and 5.2 per cent as of January 31, 2024, which is above the required minimum of real rate of return 3.5 per cent. It has also exceeded the market benchmark for the short-term (3 years) by 50 basis points as of December 31, 2023, and by 30 basis points as of January 31, 2024. In addition, the Fund demonstrated a 5-year return (2018-2022) of 4.2 per cent, outperforming both the global median of 3.3 per cent and the peer median of 2.7 per cent. The Fund's assets-to-liabilities ratio, also known as the funding ratio, is greater than 110 per cent, indicating strong financial health.
Pension Board Work Plan for 2023
The Pension Board took note of the priorities for its work plan for 2024, including the items requiring further action requested by the UN General Assembly in its 2023 resolution on the Fund (78/253) https://www.unjspf.org/newsroom/highlights-of-2023-united-nations-general-assembly-resolution-on-pension-matters/.
Ad Hoc Working Group on criteria for admitting new member organizations
The Working Group submitted its recommendations to the Board on the criteria to be followed when considering a request from an organization to join the UNJSPF. The Board approved the Working Group’s recommendations.
Accounting Standards for the Fund
The Chief Financial Officer for the Fund informed the Board that, in September 2023, the International Public Sector Accounting Standards Board approved IPSAS 49, concerning retirement benefit plans. The new IPSAS is effective 1 January 2026, with earlier adoption permitted. The adoption of this standard will allow the Fund to be fully compliant with IPSAS. Its adoption requires amendments to section G of the Fund’s Financial Rules. The Board approved the proposed amendments to Section G of the Financial Rules with effect from the financial statements for the period 1 January to 31 December 2024.
2023 self-evaluation survey results
The Board reviewed the key findings of the survey as well as the comparison of the last three years of data. Based on the qualitative responses, the Chair indicated that she would be introducing a quarterly newsletter to the Board to address relevant information and feedback, including brief activity summaries from each Committee chair as well as updates on the Fund’s investment performance. The Board also requested that its Members and FAFICS representatives make every effort to complete the upcoming survey in July.
Review of adopted governance reform proposals
As part of the strategy for continuous growth, the Board established a Governance Review Working Group to examine ways for further improvement in the efficiency, effectiveness, and sustainability of the fund. Part of the group’s work is to review all previous proposals adopted by the Board to ensure the composition, systems, and structures of the organization continue to be fit for purpose. The Working Group has been tasked to critically study all decisions of the Pension Board and the General Assembly as well as the recommendations of oversight bodies relating to organizational reforms. It is expected that the Working Group will submit its first progress report to the Pension Board for review in July 2024.
Small pension review
FAFICS requested that the small pension threshold amounts be reviewed, as these levels had not been adjusted for the cost of living in many years. The Board agreed and instructed the Pension Administration to provide background and financial analysis on alternatives for its consideration.
