UN JOINT STAFF PENSION FUND: USUN VOTES AGAINST

UNCLAS USUN NEW YORK 000009

SIPDIS

SIPDIS

MATT GLOCKNER IO/MPR

E.O. 12958: N/A
TAGS: AORC KUNR UNGA
SUBJECT: UN JOINT STAFF PENSION FUND: USUN VOTES AGAINST
ONE TIME, AD HOC, EX-GRATIA PAYMENT TO ECUADORIAN RETIREES.

REF: SECSTATE 168177

1.(U) Throughout the consideration of agenda item 128:
Questions related to the UN Joint Staff Pension Fund (UNJSPF)
in the Fifth Committee, USUN objected to the G-77 proposal to
approve a one time, ad hoc, ex-gratia payment to retirees and
other beneficiaries of the UNJSPF who have been "adversely"
affected by dollarization in Ecuador. USUN consistently noted
the concerns expressed by the Committee of Actuaries and by
the ACABQ (A/62/7/Add.3) that such a payment would deviate
from the UNJSPF's income replacement principle and would also
establish a dangerous precedent that would invite similar
requests by other groups of UN pensioners. In addition, USUN
argued that it was unconscionable for the UN to make payments
totaling $500,000 to some 79 relatively well off Ecuadorian
UN pensioners while the UN struggles to raise funds for
millions of other truly needy individuals around the world.
USUN noted that, putting aside other possible sources income,
many of those 79 former professional UN staff members were
receiving pensions that exceed $20,000 a year - going as high
as over $50,000 per year - in a country where the average
annual income is $2,840 and the poverty rate is 35 percent.

2.(U) In an effort to reach a compromise, USUN proposed that
these one time, ad hoc, ex-gratia payments be funded through
voluntary contributions. The Russia Federation supported the
compromise but the EU and the CANZ did not. The G-77 rejected
the US proposal outright. USUN has been informed that the EU
and CANZ had struck a deal to support these payments in
return for G-77 support to reduce direct UN support to
administrative costs of the Pension Fund. As previously
discussed, USUN argued to its EU and CANZ colleagues, the
issue of regular budget support to the administrative costs
of the UNJSPF is a separate issue which justifies action by
the Fifth Committee on its merits without reference to the
issue of these payments.

3.(U) Consistent with the instructions contained in reftel,
USUN indicated that it could not join consensus and called
for a vote in the Fifth Committee on paragraph 10 of draft
resolution A/C.5/62/L.25, which approves the one time, ad
hoc, ex-gratia payment and also on the resolution as a whole.
Paragraph 10 was approved by a vote of 93 in favor to 1
against (USG) with 47 abstentions. Virtually the entire EU
abstained on this vote. The draft resolution as a whole was
approved by a vote of 140 in favor to 1 against (USG) with 1
abstention (Canada). Following adoption of the resolution,
USUN/MR Counselor Bruce Rashkow delivered an explanation of
vote (EOV) (see para 4). The vote on UNJSPF was repeated in
the GA. In the GA, Paragraph 10 was approved by a vote of 95
in favor to 1 against (USG) with 45 abstentions. Once again,
virtually the entire EU abstained on this vote. The
resolution as a whole was approved by a vote of 140 in favor
to 1 against (USG) with 1 abstention (Canada).

4.(U) On December 21, 2007, following the vote on UNJSPF in
the Fifth Committee, USUN/MR Counselor Bruce Rashkow
delivered the following EOV. Begin text:

Thank you Mr. Chairman.

On behalf of the United Sates delegation, I would like to
express our deep disappointment concerning the decision in
this resolution to approve ad hoc, one-time, ex gratia
payments to retirees and other beneficiaries of the Pension
Fund who have been "adversely" affected by dollarization in
Ecuador. The United States remains strongly opposed to the
blanket approach endorsed by this resolution.

Mr. Chairman,

Both the Committee of Actuaries and the ACABQ concluded that
this course of action deviates from the income replacement
principle in the UNJSPF regulations and the Funds' two-track
adjustment system.

As Member States, we bear an important fiduciary
responsibility to ensure the financial health of the Pension
Fund. Accordingly, the United States could not in good
conscience endorse the proposal contained in this resolution.
We are deeply concerned that this resolution could invite
requests for future payments in other cases of national
economic instability.

As we expressed throughout the consideration of this agenda
item, we believe that this is a matter of equity for all
Joint Staff Pension Fund participants and beneficiaries and
that it is therefore inappropriate for the General Assembly
to authorize a special payment to these individuals.
Moreover, my government is deeply concerned about a decision
by the UN to provide a substantial sum to a small group of


people who are generally economically well off while the
organization struggles to help many millions of people in
desperate need around the world.

Thus, my government in good conscience cannot support a
proposal to augment the benefits for a small group of already
relatively well off individuals. In this respect we note that
many of the pensions received by the members of this group of
individuals exceed $20,000 a year - going as high as over
$50,000 a year for some - a sum that far exceeds the mean
income in a country where the annual average income is $2,840
and the poverty rate is 35%.

It is with these concerns in mind that my delegation must
voice its strong opposition to the Board's proposal.

For these reasons, the United States feels compelled as a
matter of principal to vote against this resolution. End text.
Wolcott