UNITED NATIONS, Mar 18 (IPS) – The United Nations Joint Workers Pension Fund (UNJSPF), which is predicted to supply retirement, dying, incapacity and associated advantages for workers, upon cessation of their services– has a staggering portfolio amounting to over $81.5 billion rating far, far forward of the UN’s annual funds of $3.1 billion and its common peacekeeping funds of over $6.4 billion.
The hundreds of UN retirees and their beneficiaries, numbering over 71,000 finally depend, who depend upon their pensions for financial survival, are relentlessly protecting of the Fund—whereas protesting all makes an attempt at dangerous investments.
The Coordinating Committee for Worldwide Workers Unions and Associations of the UN system (CCISUA), which represents over 60,000 staffers worldwide, is protesting a brand new proposed plan to “outsource a big a part of the pension fund’s investments to Wall Avenue”.
In a letter to Pedro Guazo, Consultant of the Secretary-Normal for the funding of UNJSPF belongings, Prisca Chaoui, the CCISUA President warned final week that the proposed outsourcing “in the end calls into query the character of our pension fund.”
“Is it one which continues to be managed prudently by specialists employed by the fund, who by being UN employees have a stake in its long-term well being, a system that employs the fund’s economies of scale to maintain down prices and that has by the fund’s personal telling outperformed the non-public sector thus far?” she requested.
“Or is it one that’s outsourced to Wall Avenue to be the sufferer of a short-term get-rich-quick bonus tradition with little regard to the welfare of beneficiaries all over the world?”
“Primarily based on the data that has been shared with us”, says Chaoui, “we fail to grasp the explanations behind the transfer to exterior administration, given the pointless and dear duplication of inside capability.”
“We additionally consider that your intention to “cease the bleeding” has been addressed by the administration adjustments you will have applied in response to points highlighted by the UN’s Workplace of Inside Oversight Companies (OIOS), and thru a brand new Strategic Asset Allocation that considerably reduces our publicity to dangerous belongings”.
Provided that the pension fund has entry to the identical monetary devices as Wall Avenue, and employs equally skilled funding officers, she argues, there must be no motive for a decrease efficiency.
“Certainly, the pension fund’s different portfolios have labored high-quality underneath inside administration.”
“We stand at the moment at a fork within the street that can resolve the way forward for our fund. We ask that you just reverse the outsourcing technique and maintain the administration of our belongings safely in-house,” she declared.
In the meantime, a petition at present in circulation amongst retirees and UN staffers, says Secretary-Normal Antonio Guterres claims this can be a momentary measure that can improve efficiency.
“Nonetheless, the plans authorize a rise in outsourcing over a interval of three years. And over the long run, our conservative, internally-managed UN pension fund has carried out higher than many externally-managed remaining wage funds which have since been compelled to shut. Certainly, our fund is in actuarial stability,” says the petition looking for signatures.
“Below the proposal, as much as 75 p.c of the fund’s fixed-income portfolio can be externally managed.”
The Secretary-Normal is continuing with the outsourcing regardless of robust considerations expressed on the February assembly of the pension board, regardless of a letter of protest from CCISUA (https://www.staffcoordinatingcouncil.org/wp-content/uploads/2022/03/PF-protest-letter.pdf) and regardless of the UN’s personal Board of Auditors noting that the fund shouldn’t be capable of successfully consider its exterior managers.
In 2007, one 12 months earlier than the worldwide monetary disaster and the collapse of many monetary establishments, former Secretary-Normal Kofi Annan thought-about outsourcing to Wall Avenue. However he properly modified course following employees protests and stored our fund protected, says the petition.
“By handing our pension fund to Wall Avenue in these financially turbulent occasions, it dangers turning into the sufferer of a short-term, greed-is-good bonus tradition that has little regard for the welfare of our employees and retirees all over the world and little regard for the moral values of the UN”, says the petition titled “Secretary-Normal Antonio Guterres: Don’t hand our UN pension fund to Wall Avenue.”
“By signing this petition, you name on the Secretary-Normal, to as soon as once more cease the outsourcing of our pension fund and maintain its administration in-house. Please share this along with your colleagues throughout the UN and specialised businesses”.
Responding to the continued protests, Pedro Guazo, Consultant of the Secretary-Normal for the funding of UNJSPF belongings, stated on 16 March the Fund is conscious of extra considerations expressed on the momentary outsourcing of a part of the fastened earnings portfolio.
“As introduced on the final Pension Board assembly on 24-25 February 2022 (see right here) and in my message of 12 March 2022, the investments of the UN Pension Fund are doing very nicely general, given the present financial and geopolitical context.”
Nonetheless, argued Guazo, the Fund can do higher within the fastened earnings portfolio. For a few years that portfolio has underperformed in opposition to its benchmark, as outlined on the Fund’s web site right here.
He identified that the Fastened Revenue Group of the Fund’s Workplace of Funding Administration put a proposal to handle a part of the portfolio internally (35%) and, briefly, utilizing an exterior advisor underneath the supervision and management by the identical inside workforce (65%).
This 65% of the fastened earnings portfolio represents round 18% of the full portfolio managed by the Workplace of Funding Administration.
“This proposal has been reviewed by the inner committee, by the Pension Board and the Fund’s Investments Committee, concurring this can be a good momentary answer to lift the efficiency of the fastened earnings portfolio. Using momentary exterior advisors is a greatest apply within the pension fund business to handle underperforming asset courses,” he famous.
The instant profit for the UN Pension Fund, he stated, can be extra USD 60 million a 12 months in income and this answer is solely momentary. When the workforce is prepared in some months the Workplace of Funding Administration will once more handle the portfolio internally.
“I hope this clarifies the target and the advantages of this operation, that can, once more, be utilized just for a restricted time,” he added.
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