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