Pensionable remuneration
Introductory note. The Regulations of the UN Joint Staff Pension Fund are made by the UN General Assembly, after considering the observations of the Joint Staff Pension Board. In the latter, whose composition is laid down in the JSPF Regulations, representation is on a tripartite basis - legislative bodies, participants in the Fund and executive heads being the three parties concerned. CCAQ in effect provides the machinery by which the "administrations" of the organizations can if necessary work out a common administrative position on matters dealt with or to be dealt with by Board.
The Fund was set up, under provisional Regulations, by resolution 82(1) of the General Assembly. CCAQ discussions on a common scheme are referred to in documents CC/A.2/6/Rev.1 and COORD-PREP/16 (1st and 2nd sessions: 1948). The provisional Regulations were replaced by definitive Regulations in General Assembly resolution 248 (III) of 7 December 1948. Since then, the following agencies have become members of the Fund, on the dates stated:
| WHO | 1 May 1949 |
| FAO | 1 April 1950 |
| ILO | 1 July 1950 |
| UNESCO | 1 January 1951 |
| ICAO | 1 March 1951 |
| WMO | 1 January 1952 |
| GATT (renamed WTO in 1996) | 1 June 1957 |
| IAEA | 1 October 1958 |
| IMCO (renamed IMO in 1983) | 1 July 1959 |
| ITU | 1 January 1960 |
| WIPO | 1 January 1977 |
| IFAD | 1 January 1978 |
| UNIDO | 1 January 1986 |
Some organizations, which are not members of the UN common system, have become members of the Pension Fund. These are:
| ICCROM | 1 January 1981 |
| EPPO | 1 January 1983 |
The questions which CCAQ has discussed, prior to or as a result of the Pension Board taking a position on them, are dealt with in the following sections of this chapter.
Section 6.1: Pensionable remuneration
(1) At the second part of the 17th session (April 1956: CO-ORDINATION/R.224) CCAQ approved a statement showing which elements of remuneration were pensionable and which were not - see Annex I, CO-ORDINATION/R.224.
(2) At the special meeting on salary questions (March 1957: CO-ORDINATION/R.244) the Committee recommended that ACC should appoint a small group of experts to examine the question of pensionable remuneration. This Committee's report led to resolution 1310 (XIII) of the General Assembly which, inter alia, called for a comprehensive review of the whole pension scheme. CCAQ at its 20th session (1959: CO-ORDINATION/R.295, paras. 52-55), discussed certain arrangements for this review.
(3) At the second part of its 21st session (August 1960: CO-ORDINATION/R.336) CCAQ discussed the recommendations of the Pension Review Group which, after discussion in the Pension Board, led ultimately to substantial revision of the scheme; revised Regulations effective 1 April 1961 were approved - part II of General Assembly resolution 1561 (XV). Part I of the same resolution defined pensionable remuneration as the "half-gross" salary (including language allowance where payable) plus the net amount of any non-resident's allowance. As regards staff at P.1 and above, the half-gross salary was to be increased in multiples of 5 per cent whenever the weighted average of post adjustments (WAPA) at the headquarters and regional offices increased by 5 per cent measured from 1 January 1956.
(4) At the first part of the 22nd session (January and March 1961: CO-ORDINATION/R.351), since some organizations had a gross system and others net, CCAQ drew up a precise definition of pensionable remuneration in all organizations participating in the Fund - see paras. 35-36 and 38 of CO-ORDINATION/R.351. It further agreed (para. 37) on the method of calculating the movement of the weighted average post adjustment (WAPA).
(5) The definition of pensionable remuneration agreed in April 1961 (see paragraph (4) above) included, in line 8 of paragraph 35(b) (ii) of CO-ORDINATION/R.351, the word "normally". It was subsequently agreed by correspondence to delete this word, and the fact was recorded at the second part of the session (July 1961: CO-ORDINATION/R.373, para. 38).
(6) Following consolidation of part of the post adjustment into the revised base salaries effective 1 January 1962 (see section 4.2, para. (3)), the pensionable remuneration for Professional and higher staff as from 1 January 1962 became the new "half-gross" salary; additions in respect of movement of weighted average post adjustment were to be made only in respect of the movement measured from 1 January 1962. At its 23rd session (1962: CO-ORDINATION/R.391, paras. 43-44) CCAQ took note of a preliminary calculation of the new base level of the weighted average; a final calculation was to be circulated by UN.
(7) At the 24th session (1963: CO-ORDINATION/R.430, paras. 42-44) CCAQ noted that the weighted average of post adjustments at headquarters and main regional offices was 111.2 as of 1 January 1962. This figure was to be taken as 100 for purposes of calculating future movements of 5 per cent, or any multiple thereof, in the weighted average of post adjustments, for pension purposes (see CO-ORDINATION/CC.24/12).
(8) At its 25th session (1964: CO-ORDINATION/R.451, paras. 65-66 and Annex D), CCAQ noted that the movement of the weighted average post adjustment since 1 January 1962 had been 4.5 per cent as at 31 December 1963 and 5.6 per cent on 1 January 1964. Pensionable remuneration for the Professional category would therefore be increased on 1 January 1965.
(9) At the second part of its 25th session (October 1964: CO-ORDINATION/R.480), CCAQ noted that the Joint Staff Pension Board had at its XIIth session recommended (a) that pensionable remuneration should be put on a full gross basis from 1 January 1965; (b) a scheme for cost-of-living adjustment of pensions after award. CCAQ agreed on the draft of an ACC statement supporting both proposals.
(10) The proposal for the full gross basis (see para. (9)) was approved by the General Assembly at its nineteenth session in resolution 2007 (XIX), to be effective 1 March 1965. The General Assembly was, however, unable to take action on the other proposals of the Joint Staff Pension Board.
(11) At the 26th session of CCAQ (1965: CO-ORDINATION/R.488, paras. 35-36), UN reported that by 3 December 1964 the weighted average of post adjustments had risen 9.2 per cent over the base figure on 1 January 1962. Base pensionable remuneration should therefore be increased, for the Professional and higher categories, by 5 per cent on 1 January 1965.
(12) Also at the 26th session CCAQ agreed that it would be preferable to modify the system of adjustment of pensionable remuneration in such a way that 5 per cent changes would be made only if justified by the March or September lists of post adjustment classifications. An increase of 5 per cent over base reflected by the March figures should be operative the following 1 July; one justified by the September list should be operative the following 1 January.
(13) The 27th session of CCAQ (1966: CO-ORDINATION/R.532, para. 45 and Annex H) noted that as a result of the revision of base salaries from 1 January 1966 the weighted average of post adjustments on that date would be 112.7, which became a new base of 100 for purposes of changes in pensionable remuneration.
(14) At its 29th session (March 1968: CO-ORDINATION/R.669, paras. 80-82) CCAQ noted the current position regarding weighted average of post adjustments (WAPA) (CO-ORDINATION/CC.29/R.37). It noted also that the weighted average was calculated by weighting the post adjustment classification of all duty stations at which there were ten or more full participants in the Professional or higher categories in the JSPF by the number of such participants serving at the duty station concerned. At the time that method had been adopted, very few project staff were full participants in JSPF. As a result of changes made in JSPF regulations with effect from 1 January 1967, many more project staff became full participants. In consequence a large number of small duty stations were brought into the calculations of the weighted average, contrary to the original intention. CCAQ requested the UN Office of the Controller to re-examine the matter with a view to excluding all but the most important field offices and the regional and headquarters offices. The subject was to be dealt with by correspondence between UN and the other organizations.
(15) Under existing rules, promotion from the General Service to the Professional category could result in a reduction in the level of pensionable (though not the total) remuneration. CCAQ agreed at its 30th session (March 1969: CO-ORDINATION/R.733, paras. 31 and 32), with the UN dissenting, that organizations should provide that:
"Where a promotion from G.S. to P. category would result in a reduction in the level of the pensionable remuneration, this remuneration may, at the option of the official, be maintained at its previous level (with contributions accordingly) until such time as this level is surpassed by the level of pensionable remunerations in the new grade."
(16) At its 30th session (March 1969: CO-ORDINATION/R.733, paras. 34-38) CCAQ agreed that a regional office, for the purpose of the index of weighted average of post adjustments, should be any duty station where the number of posts in the Professional and higher categories of all organizations of the common system was 100 or more, or where the number in any one organization was 40 or more. The annual CCAQ list of regular and project personnel posts at January 1969 should be the initial basis for determining the duty stations concerned. Further, once the initial list of duty stations had been established, it should remain unchanged until such time as a new base date was introduced as a result of future consolidation of post adjustment into the salary scales; the number of participants would also remain unchanged for each calculation in the period. The weighted average at 1 January 1969 should be regarded as 100 for the purpose of measuring future index movements until a new base date was introduced.
(17) At its 35th session (March 1972: CO-ORDINATION/R.931, paras. 57-59), CCAQ noted, from a report by the UN Controller, that on 1 July 1971 the WAPA was 115.8; this figure became the base 100 for the purpose of measuring increases in the WAPA. As at 1 March 1972, the WAPA was 121.7. The increase since 1 July 1971 was thus 5.1 per cent, and in accordance with the relevant UN General Assembly resolution, there would be a 5 per cent increase in pensionable remuneration of Professional staff from 1 July 1972.
(18) At its 37th session (March 1973: CO-ORDINATION/R.984, para. 34) CCAQ noted that partly because of the impact of currency revaluation upon post adjustments, the WAPA in March 1973 would be over 15 per cent above its level on 1 July 1971. Pensionable remuneration of staff in the Professional and higher categories would be increased accordingly from July 1973.
(19) In connection with the general review of salaries and allowances undertaken by ICSAB at its XXIInd session in 1974 and the issues before the Joint Staff Pension Board at its 19th session in that same year, CCAQ agreed that the procedure for incorporation of the movement of the weighted average of post adjustments into the definition of pensionable remuneration should be modified so that:
(a) the movement would be examined quarterly rather than semi-annually;
and
(b) when the quarterly review reflected the degree of movement warranting incorporation, this should be effective at the beginning of the next quarter.
UN undertook to include this proposal in the total presentation regarding conditions of service to the twenty-ninth session of the General Assembly.
(20) At its special session in August 1975, (CO-ORDINATION/R.1113, paras. 32 to 35), CCAQ(PER) examined the implications of an ILO Tribunal Judgment in favour of an FAO appellant, who, on retirement from the Professional category, claimed a right to the pensionable remuneration level of the GS grade from which earlier promoted. The judgment had been based on the specific (and defective) language of the FAO rule cited, and implications for other cases were limited. As to the general issue, CCAQ concluded "that a staff member's entitlements at any stage of his career including retirement, must be determined on the basis of his administrative situation at the time and under the provisions applicable to that situation".
(21) At its resumed 43rd session (April 1976: CO-ORDINATION/R.1162, para. 21) CCAQ agreed that, to ensure uniform application of the recent agreement on General Service salaries in Geneva, the increase referred to in paragraph 5 of the agreement would be applied to all staff members who, on separation from service on or after 1 August 1975, became entitled to a periodic benefit from the UNJSPF or from the pension fund of an organization.
(22) After recommending revised scales of staff assessment, post adjustment rates and gross and net salaries for staff in the Professional and higher categories, ICSC in its second annual report recommended that the existing scale of pensionable remuneration should be maintained temporarily where it was higher than the revised level, until such time as it was overtaken by the new level following an adjustment by the movement of the WAPA index (A/31/30, paras. 69, 238-240, 247). This recommendation was approved by the General Assembly in resolution 31/141.
(23) Dealing with implementation of the recent reforms of the salary system, CCAQ at its 46th session (January 1977: CO-ORDINATION/R.1203, para. 7) agreed that no staff member appointed on or after 1 January 1977 should be entitled to the pensionable remuneration resulting from the salary scales in effect on 31 December 1976 for the Professional and higher categories.
(24) At its 49th session (July 1978: CO-ORDINATION/R.1294, paras. 25-27) CCAQ had a preliminary exchange of views on the subject of pensionable remuneration, which was considered in conjunction with an item on the effects of currency instability. The Committee agreed to inform the Commission that the question of defining an appropriate level of pensionable remuneration reflected widespread concern at the failure of the salary system to deal adequately with the effects of currency changes on pensions.
(25) CCAQ devoted its resumed 49th session (September 1978: CO-ORDINATION/R.1294 (PART II)) to the development of its position on pensionable remuneration vis-à-vis ICSC. The Committee agreed that the existing method of adjusting pensionable remuneration in accordance with movements of the WAPA index should be maintained until ICSC had completed its study of pensionable remuneration in 1979.
(26) At its 50th session (January-February 1979: ACC/1979/R.2, paras. 5-11) CCAQ reviewed a certain number of proposed methods for revising the manner in which pensionable remuneration, particularly for the Professional and higher categories, was established.
(27) At its 50th session (Part II) (February-March 1979: ACC/1979/R.2 (Part II)) CCAQ reviewed its presentation to ICSC based on the question contained in ICSC/R.147. It left some flexibility in its approach in order to be able to further respond to developments at the 10th session of ICSC.
(28) Also at the 50th session (Part II) the Committee agreed that (a) where a staff member was promoted from the General Service category to the Professional category with a resultant decrease in pensionable remuneration, it would be mandatory to maintain the higher level of pensionable remuneration until it was exceeded by the level in the new category; and (b) demotions of staff from the Professional to the General Service category should be limited to those cases only which arose out of a classification review, a disciplinary action or reassignment.
(29) At its 51st session (August 1979: ACC/1979/R.55, paras. 4-9) CCAQ agreed that since ICSC appeared not to be in a position to adopt fully developed proposals on pensionable remuneration, the following course of action might be pursued:
(a) to submit to the General Assembly at its thirty-fourth session an interim report on the stage that had been reached in the examination of the question;
(b) to extend the study for another year with a view to developing proposals in co-operation with the Pension Board;
(c) to welcome the intention of the Pension Board to work out interim measures for improving the initial pensions of staff members retiring in 1980 whose pension would otherwise fall below a specified percentage of net remuneration in the country of retirement, and to request the Secretary of the Commission to co-operate in the elaboration of these measures;
(d) pending the completion of the study, the existing method of adjusting pensionable remuneration should remain in force.
(30) The General Assembly adopted resolution 34/221 on 20 December 1979, which inter alia:
(a) authorized the United Nations Joint Staff Pension Fund to implement in 1980 the interim measures as recommended by the Advisory Committee on Administrative and Budgetary Questions; and
(b) requested the ICSC and UNJSPB to conclude in 1980 their comprehensive examination of the question of pensionable remuneration.
(31) At its 53rd session (July 1980: ACC/1980/17, Annex III) CCAQ noted and endorsed the agreement which had been reached at the 27th session of the UNJSPB: the so-called "Washington proposal" for the adjustment of initial pension to compensate for differences in cost of living, including the effects of currency instability (see report of UNJSPB to the 35th session of the General Assembly, A/35/9, paragraph 17-70; also 6th (1980) annual report of ICSC, A/35/30, paras. 28-87).
(32) At its 12th session (July 1980) ICSC endorsed the "Washington proposal" and decided that pensionable remuneration for the Professional and higher categories on 1 January 1981 should be a function of the revised rates of gross remuneration which would become effective that date as a result of the consolidation of 30 points of post adjustment into base salary and the simultaneous revision in the scale of staff assessment for such staff (6th annual report, A/35/30, paras. 28-87). (See section 2.1).
(33) At the same session ICSC decided that from 1 January 1981, the index used for adjusting pensionable remunerations should be:
(a) the US/CPI for adjusting pensionable remuneration used to compute benefits; and
(b) the WAPA index for adjusting pensionable remuneration used to determine contributions to the Pension Fund, it being understood that pensionable remuneration for contribution purposes (PR/C) would never drop below the level of pensionable remuneration for benefit purposes (PR/B).
(34) With regard to the General Service category, ICSC reviewed various options for determining the staff assessment, and therefore the pensionable remuneration, of that category, and adopted a new scale of staff assessment, effective 1 January 1981 (see section 2.1). It also endorsed the principle of the application of the "Washington proposal" to General Service staff who retired in a country other than that of their duty station.
(35) At each subsequent session of the Commission, a report was presented on the movement of the two indexes, US/CPI and WAPA.
(36) At its 18th session (March 1983), the Commission decided on a new methodology for payment of the non-resident's allowance, effective 1 September 1983, including the provision that the NRA would be non-pensionable (see section 2.5, para. (4)).
(37) At its 38th (1983) session, the United Nations General Assembly called on ICSC and the Pension Board to collaborate in a study of the level of pensionable remuneration of staff in the Professional and higher categories, and decided, pending the completion of the study to be submitted to it at its 39th session (1984), to defer any adjustment in pensionable remuneration which might become due in 1984 on the basis of Article 54(b) of the Regulation of the Pension Fund.
(38) At its 61st session (June-July 1984: ACC/1984/16, paras. 30-36), CCAQ gave consideration toproposals before ICSC for a new methodology for determining pensionable remuneration for staff in theProfessional and higher categories. CCAQ considered that the proposals required further study, in viewof doubts which were expressed concerning the appropriateness of the comparison of the level of pensionsand pensionable remuneration between the United States federal civil service and the UN pension system.
(39) At its 20th session (July 1984: 10th annual report - A/39/30, paras. 8-69 and annex VI) ICSC decided to recommend to the General Assembly a new scale of pensionable remuneration for staff in the Professional and higher categories, based on the methodology referred to above, and effective 1 January 1985. ICSC also decided to recommend that the General Assembly grant the increase of 5.4% in pensionable remuneration which had become due on 1 October 1984 under the existing adjustment procedure.
(40) The Pension Board considered this proposed new methodology and the resulting scale at its 33rd session (August 1984 supplemented by a special working party in September 1984). It endorsed the recommendations of the Commission, indicating, however, that the methodology should be closely monitored and would perhaps have to be refined.
(41) At the request of ACC, CCAQ met in special session (October 1984: ACC/1984/22) to report on questions of pensions and pensionable remuneration. It approved the draft of a statement to be made by ACC to the General Assembly in which it endorsed the recommendation of the Commission relating to a new scale of pensionable remuneration effective 1 January 1985 and noted that the increase of 5.4% in the existing scale of pensionable remuneration would be applied by almost all organizations not subject to the authority of the General Assembly, since their regulations obliged them to do so; it urged that the General Assembly not delay any further the adjustment which was due.
(42) At its 39th session (1984, resolution 39/246) the General Assembly decided that the upward adjustment of pensionable remuneration, which had become due on 1 October 1984, would be applied from that date through 31 December 1984. It also approved the scale of pensionable remuneration recommended by the Commission for implementation with effect from 1 January 1985 (increase of 4% at P-1 level, decrease of 14% at D-2 level). It requested the Commission to study pensionable remuneration further, in co-operation with the Pension Board and to report to the General Assembly at its 40th session, in order that the Assembly could consider whether it would be appropriate to request the Commission to propose a new scale of pensionable remuneration for Professional and higher category staff to its 41st session.
(43) The Commission reported on its further studies to the General Assembly at its 40th session (A/40/30, paras. 11-42); the General Assembly confirmed (1985, resolution 40/245) its request for recommendations concerning a new scale to be submitted to its 41st session. It introduced a ceiling (60% of pensionable remuneration) on the level of retirement benefits payable to participants at USG, ASG or equivalent level, retiring on or after 1 April 1986. It also amended the regulations of the Pension Fund and made provision for transitional measures, contained in supplementary article C.
(44) The Commission secretariat submitted a general study to the Commission at its 23rd session (March 1986) after consultation with the Standing Committee of the Pension Board; the Commission decided on some major options and requested its secretariat to make alternative proposals at its 24th session (July 1986). These proposals were presented to the Pension Board at its 35th session (June) and subsequently to the Commission (ICSC/24/R.6). In the meantime (end of June 1986), CCAQ had presented a report on pension-related matters to ACC, which endorsed the conclusion of the Pension Board (ACC/1986/DEC/13). (See also report of 65th session of CCAQ: ACC/1986/10, paras. 43-54).
(45) At its 24th session, the Commission recommended to the General Assembly a new scale of pensionable remuneration for the Professional and higher categories, for adoption effective 1 April 1987 (A/41/30, para. 32 and Annex III). This scale was on average, 6.8% lower than the scale introduced on 1 January 1985.
(46) Also at its 24th session, ICSC recommended a new scale of General Service staff assessment to the General Assembly, for adoption effective 1 January 1987 (see section 2.1, para.(22)); the General Assembly approved that recommendation (41/206, III).
(47) At a special session in September 1986, the Pension Board confirmed the views it had expressed in June (see para. (44) above), and suggested that efforts be made to reach joint recommendations by further genuine dialogue between the Commission and the Pension Board (A/41/9, para. 41). ACC expressed a similar wish in October 1986 (ACC/1986, decision 22).
(48) After considerable discussion, the General Assembly, by resolution 41/208, approved a scale of pensionable remuneration for Professional and higher category staff, effective 1 April 1987, which is close to the Commission's proposals at the higher end of the scale and to those of the Pension Board at the lower end.
(49) Also by resolution 41/208, the General Assembly decided to impose a limit on the maximum amount of the "lump sum" commutation of benefits, which should not exceed the amount payable to a staff member, grade P-5, top step, with 35 years' participation in the Fund.
(50) At a special session on 21 June 1987, ACC addressed a statement to the Pension Board (ACC decision 1987/14 - reproduced as JSPB/37/R.34).
(51) At its 37th session (August 1987) the Pension Board recommended to the General Assembly that the contribution rate to the Pension Fund be increased to 22.5 per cent of pensionable remuneration (15% by the organization, 7.5% by the staff), effective 1 January 1988 (A/42/9, para. 28). The General Assembly, in resolution 42/222, decided that the increase should be implemented in two stages: on 1 July 1988 from 21.75 to 22.20 per cent and on 1 July 1989 from 22.20 to 22.50 per cent.
(52) The Pension Board also recommended to the General Assembly that participants in the Professional category separating from service at the age of 60 in 1987, and participants separating from service in 1988, 1989 and 1990 (except for deferred retirement benefits and survivors' and other benefits derived therefrom), be protected against a drop in their pension expressed in local currency, by the establishment of a floor corresponding to the average, in 1987, of the local currency/dollar ratio for the calculation of the initial pension (A/42/9, paras. 69-72 and Annex XI). The General Assembly approved this recommendation, as an interim emergency measure, for application from 1 January 1988 to 31 December 1990, without retroactive effect and on the understanding that this did not constitute an acquired right.
(53) Also at its 37th session (JSPB/37/R.36, para. 93), the Pension Board requested its Secretary to draw CCAQ's attention to the matter of duty stations where participants in the General Service category received as part of their emoluments non-pensionable compensation in kind, with a view to taking measures to rectify any inequities.
(54) At its 69th session (July 1988: ACC/1988/12, paras. 97-100) CCAQ urged that there be close co-ordination between a study by UNJSPB of the methodology for determining pensionable remuneration for General Service staff, and its own impending study of alternative methodologies for setting General Service staff assessment scales to mitigate the effects of currency fluctuations.
(55) At the same session (ibid., paras. 101-102), CCAQ endorsed a series of recommendations by the New York Local Salary Survey Steering Committee on in-kind emoluments (food baskets) as a supplement to local salary scales at field duty stations, and in particular their quantification into pensionable remuneration. It called for full consultation before any decision to make a food basket pensionable (see also ACC/1988/4, paras. 55-57).
(56) At its 71st session (July-August 1989: ACC/1989/14, paras. 113-117), CCAQ gave reluctant support - as a provisional and one-time measure - to a formula intended to reduce the widening ratio of UN to US pensionable remuneration levels for staff in the Professional and higher categories. According to that formula, subsequently recommended by ICSC and endorsed by the General Assembly (resolution 44/199; A/44/30, vol. I, paras. 25-43), any adjustment to pensionable remuneration due before completion of the scheduled 1990 review should be made without application of the 1.22 multiplicative factor, and in addition, the first such adjustment should be reduced by 2.8 percentage points in order to remove the past impact of the 1.22 factor. Furthermore, the Commission decided that henceforth it would consider annually the question of pensionable remuneration levels.
(57) Also at its 71st session, CCAQ decided to ask ICSC to hold over, until its impending review of pensionable remuneration for the General Service category, two issues relating to the establishment of a non-pensionable component of salary: its threshold and limitations on its size (ACC/1989/14, paras. 142, 143).
(58) In view of a 1986 request by the General Assembly for a comprehensive report in 1990 on pensionable remuneration for the Professional and higher categories (resolution 41/208, further elaborated in resolution 44/199), both CCAQ and ICSC - as well as the Pension Board - gave close attention to this question. The view of CCAQ, expressed at its 72nd and 73rd sessions (February-March and July 1990: ACC/1990/4, paras. 114-119; ACC/1990/10, paras. 88-93) was that frequent changes should not be made in pensionable remuneration methodology; that income replacement, in the form of total net remuneration at the base, should continue to be the basis of that methodology, along with 25 years of contributory service; and that if it were felt that a margin should be established for pensionable remuneration, it should be consistent with the net remuneration margin. The Committee further asked the Commission to consider bringing the scale of staff assessment used for computing gross salaries more into line with that used for pensionable remuneration purposes, since because of the increases in the base/floor salary level there no longer seemed to be a sound reason for maintaining the considerable differences between the two; emphasized to ICSC the importance of finding an equitable and long-lasting solution to the problem of pension adjustment procedures; and took note of a FICSA proposal that total net remuneration be taken into account to determine pensionable remuneration levels. ICSC finally recommended to the Assembly that the margin range of 110-120 applicable to net remuneration should also apply to pensionable remuneration; proposed a scale of staff assessment for determining pensionable remuneration; and recommended that other essential features of the existing methodologies for setting and adjusting pensionable remuneration should continue (for the full text see A/45/30, para. 38). The Assembly (resolution 45/242) accepted all the above recommendations except the first: it did not specify a margin range for pensionable remuneration.
(59) The views of CCAQ on managing pensionable remuneration in 1990 are in ACC/1990/4, paras. 121-124; the corresponding discussion in ICSC is reported in A/45/30, paras. 39-43.
(60) On the basis of an opinion from the UN Legal Counsel ICSC decided that it had neither statutory authority nor a mandate from the General Assembly to address the pensionable remuneration of ungraded officials, i.e. the executive heads of the organizations (report of the Commission for 1990: A/45/30, paras. 44-49). The Assembly accordingly provided such a mandate: expressing concern at the divergent practices of the organizations, it asked the Commission, in co-operation with the Pension Board, to review the methodology for setting the pensionable remuneration of such ungraded officials who were participants in the Pension Fund (resolution 45/242). For its part CCAQ at its 72nd session (February-March 1990) had expressed strongly the view that the conditions of service of the executive heads were for the respective governing bodies to determine (ACC/1990/4, para. 120).
(61) At its 31st session (March 1990: A/45/30, paras. 50-57) ICSC decided that because of the complexity of the issues involved it would have to defer from 1990 to 1991 its planned review of pensionable remuneration of General Service and related categories of staff. It further decided to set up a joint preparatory working group consisting of three members of the Commission, six members of UNJSPB and one member each from FICSA and CCISUA. These arrangements had been concurred with by the Pension Board. Preliminary comments by CCAQ on the review concerned mainly the consultation process and the minimum (threshold) and maximum (ceiling) levels of the non-pensionable component of remuneration; its views are in the report of its 72nd session (February-March 1990; ACC/1990/4, paras. 125-128).
(62) At both its 74th and 75th sessions (March and July-August 1991) CCAQ discussed proposals before ICSC on the methodology for fixing the pensionable remuneration of ungraded officials (see para. (60) above), as requested in General Assembly resolution 45/242. Its comments focused especially on the authority of the governing bodies of the organizations in the final determination of appropriate levels of pensionable remuneration, and their adjustment, but it also addressed other aspects of the proposed methodology (ACC/1991/5, paras. 37-39; ACC/1991/17, paras. 79-85). The deliberations of the Pension Board on methodology are summarized in paragraphs 83-109 of its 1991 report (A/46/9). The methodology and associated principles recommended by ICSC to the General Assembly and the governing bodies of other organizations participating in UNJSPF are in paragraph 71 of its 1991 report (A/46/30, vol. I); they reflect a number of views expressed by CCAQ (see also paras. 51-70 of A/46/30, vol. I). ACC subsequently suggested that three former executive heads be nominated to make concrete proposals on detailed criteria and parameters for the comparability of pension arrangements outside the Pension Fund for ungraded elected officials with statutory limits on their terms of office. The General Assembly approved the methodology proposed and invited ICSC to consider again the guiding principles for the establishment of pensionable remuneration levels for ungraded elected officials who were not participants in the Fund (resolution 46/192).
(63) At the same sessions (ACC/1991/5, paras. 122-128; ACC/1991/17, paras. 74-78) CCAQ discussed issues arising from the comprehensive review by ICSC of the pensionable remuneration of staff in the General Service and related categories (see para. (61) above). It favoured a universal rather than duty station-by-duty station approach to this question, but with arrangements to reduce the effect of fluctuations in the value of the United States dollar. For its part ICSC recommended phased steps under which the currency methodology would continue to be used pending further studies of possible alternatives by the secretariats of the Commission and UNJSPB. Final recommendations would be submitted to the General Assembly at its 47th session (1992). The Commission recommended a revised scale of staff assessment for these categories of staff based on the latest tax data for 25 countries (A/46/30, vol. I, paras. 72-90). The Assembly accepted the ICSC's recommendations (resolution 46/192).
(64) At its 75th session (July-August 1991: ACC/1991/17, paras. 28-30) CCAQ took note of information provided by the ICSC secretariat on the forecast level for 1991 of the margin between the pensionable remuneration of United Nations staff in the Professional and higher categories and that of equivalent officials of the comparator civil service. The Commission reported the data to the General Assembly (A/46/30, vol. I, paras. 46-50).
(65) In 1991 ICSC considered the implications of a decision of the International Labour Conference at its 78th session (June 1991) to proceed with its proposal to establish a Voluntary Thrift Benefit Fund as part of measures to realign its definition of pensionable remuneration with article 54 of the regulations of UNJSPF. The Commission's views are in its report (A/46/30, vol. I, paras. 16-32). In July 1991 the General Assembly (45th session; resolution 45/268) expressed concern at the ILO action and also at the decision of the Administrative Council of ITU to implement a pension purchasing power protection insurance plan if the General Assembly did not approve an appropriate long-term solution to the question of the initial adjustment of pensions in local currency, and asked the Commission and the Pension Board to examine the bases for the decisions and their implications for the common system (see also section 6.6 for details of the pension adjustment system).
(66) At its 76th session (March 1992: ACC/1992/6, paras. 46-50) the Committee had preliminary discussions on suggestions before ICSC on pension arrangements for ungraded officials outside the Pension Fund and decided to defer consideration until ACC's views were known on a study by three former executive heads which had been completed at the request of ACC. CCAQ considered alternative approaches to the methodology for determining the pensionable remuneration and the pensions of staff in the General Service and related categories. The pensionable remuneration could be determined either on the basis of the current methodology, local practice or income replacement (ibid., paras. 59-66). ICSC set up a Working Group of three members of the Commission, three nominated by the organizations and two each from FICSA and CCISUA to study the matter and provide an assessment of the various methodologies (ICSC/35/R.17, paras. 119-120).
(67) At its 77th session (July 1992: ACC/1992/23, paras. 48-51) CCAQ again considered the pension arrangements for ungraded officials outside the Pension Fund in the light of proposals by three former executive heads and noted that the proposals could constitute a possible arrangement for organizations to follow. Some organizations wanted to consider further options and ICAO intended to continue its current arrangements. The Commission recommended guidelines for pension arrangements for elected ungraded officials, if it were decided that they should not be participants in the UNJSPF (A/47/30, para. 69). In accordance with the procedure approved by the General Assembly in resolution 45/242, CCAQ noted that the scale of pensionable remuneration would be revised on 1 November 1992. Since the income replacement ratio of the United States federal civil service was higher than that of the international civil service, CCAQ recommended that this should be reviewed at the next comprehensive review of pensionable remuneration for Professional staff (ACC/1992/23, paras. 52-53). ICSC reported the data to the Assembly (A/47/30, paras. 49-50).
(68) At the same session CCAQ considered once more alternative approaches to the methodology for determining the pensionable remuneration of staff in the General Service and related categories on the basis of studies by the ICSC working group and UNJSPB, which preferred relating the pensionable remuneration of General Service staff to their salaries while in service. This was opposed by the participants' representatives since it would extend to General Service staff the procedure of income-replacement used for Professional staff and was contrary to the idea of local salary arrangements. The representatives of the Executive Heads in UNJSPB suggested a list of basic principles that should guide further consideration of the matter. CCAQ noted that information collected had revealed that the concern that UN pensions were too high in relation to local conditions in a number of instances was unfounded. On the general basis of the principles mentioned, CCAQ suggested four possible methodologies and suggested that the proportion of net pensionable salary to which the tax element should be applied should be 66.25 per cent, corresponding to the maximum benefit accumulation after 35 years of contributory service (ACC/1992/23, paras. 42-47). The Commission decided that at the time of a comprehensive salary survey, 56.25 per cent of net salaries at each grade and step should be used in conjunction with the current staff assessment scale to derive the pensionable remuneration of the General Service and related categories from net salary but should not be lower than net remuneration. It called on the secretariats of ICSC and UNJSPB to develop a single staff assessment scale. Interim adjustments would take place on the same date and by the same percentage as salary increases (A/47/30, para. 99)
(69) At its 78th session (March 1993: ACC/1993/6, paras. 83-92) CCAQ reviewed a document prepared by the Commission's secretariat on the use of a common scale of assessment for the Professional and General Service categories. A working group of representatives of the secretariats of ICSC, UNJSPF and CCAQ, with representatives of the organizations and staff, set up to review the question, proposed a methodology by which a single scale of staff assessment could be introduced, in conjunction with the next review of the pensionable remuneration of Professional staff in 1996. ICSC decided to reaffirm its earlier position that the income replacement approach, using 56.25 per cent of the net pensionable salary, should be used to determine the pensionable remuneration of General Service staff and adopted the working group's proposals for developing a common scale of staff assessment to be introduced in 1997, subject to the views of the UNJSPB (ICSC/37/R.18, paras. 165-166).
(70) At its 79th session (July 1993: ACC/1993/22, paras. 72-80) CCAQ continued its consideration of the pensionable remuneration of General Service staff on the basis of a report of UNJSPB which had endorsed the income replacement approach but recommended that ICSC reconsider the factor to be used for grossing-up purposes and its relationship to the number of years of contributory service. UNJSPB also agreed that a common scale of staff assessment should be introduced for application in 1997 and that the income replacement approach should be introduced on the occasion of the first salary adjustment due on or after 1 April 1994. CCAQ fully supported 66.25 per cent as the proportion of net pensionable salary to be used as the basis for the derivation of gross pensionable salary, as well as the need for frequent revisions of the staff assessment scale and took a position on a number of related matters (ibid., paras. 76-80). After reviewing the UNJSPB's report, ICSC decided to recommend to the General Assembly that the income replacement approach using 66.25 per cent of the net pensionable salary should be used (A/48/30, para. 85). The General Assembly approved the recommendations (resolution 48/225 I). CCAQ also reviewed the margin estimate for 1993 for pensionable remuneration and noted that the income replacement ratio for the UN was consistently lower than that of the comparator. It decided once again to request ICSC to investigate this (ACC/1993/22, paras. 81-82). ICSC reported the data to the Assembly (A/48/30, paras. 28-29).
(71) At its 80th session (February 1994: ACC/1994/4, paras. 95-100) CCAQ examined the special index for pensioners in the light of changes to the pension adjustment system introduced in April 1992. The current index was computed on the basis of tax information provided by a consultant for all countries and was used to reduce the cost-of-living differential factor in applying the "Washington Formula". The Committee recommended that ICSC should limit its review to two issues, namely, the taxes used in the determination of the special index and the maximum amount used in special index calculations in the light of the recent changes made in the "Washington Formula". The tax rates should be adjusted annually to reflect not only changes in nominal tax rates but also changes in the tax system itself. As to the grade and step used in the special index calculations, the P-2, top step, should be replaced by P-4, top step, which was used under the "Washington Formula". The item was deferred to ICSC's 40th session at which ICSC decided to review all aspects of the special index for pensioners as part of its review of pensionable remuneration in 1996 (A/49/30, paras. 29).
(72) At its 81st session (June 1994: ACC/1994/14, paras. 124-125) CCAQ studied a note on the margin estimate for 1994 for pensionable remuneration and welcomed the ICSC secretariat's investigation of the reasons for the income replacement ratio of the United Nations being consistently one per cent lower than that of the comparator. CCAQ noted that action should be taken in the review of pensionable remuneration in 1996 to remove the factors that led to this difference.
(73) At the first part of its 83rd session (July 1995: ACC/1995/19, paras. 65-68) CCAQ took note of the margin estimate for pensionable remuneration for 1995 and of the average income replacement ratios for the 36-month period ending on 31 December 1995. CCAQ reiterated its concern at the apparent distortion that was being created as a result of the grossing-up procedures and requested that the appropriate analyses should be prepared in good time for the comprehensive review of pensionable remuneration in 1996. ICSC noted that, as a result of other decisions, the United Nations/United States pensionable remuneration ratio had dropped by 3.7 per cent and decided to study the impact of these decisions as part of the comprehensive review of pensionable remuneration in 1996 (A/50/30, paras. 323-324).
(74) At its 84th session (April 1996: CCAQ(PER)/84/Rev.1, annex IV) CCAQ expressed continued concern that the UN level of income replacement was still about 1 per cent below that of the comparator, first, because the UN net to gross relationship reflecting the taxation systems of the seven headquarters duty stations while only US taxes were reflected on the US side of the equation and, secondly, because pensionable remuneration was determined by the application of staff assessment to 46.25 per cent of UN common system salaries. Noting a study of the relatively new Federal Employees Retirement System (FERS), CCAQ underlined that the different premises on which the FERS scheme was founded were not valid for the common system and urged that the results of the study should not be incorporated in the methodology for the determination of pensionable remuneration at the Professional and higher levels. The tentative conclusions of ICSC were to continue the current methodology (ICSC/43/R.16, paras. 58-59).
(75) At the same session CCAQ suggested that it would be more appropriate for ICSC to review the methodology for the determination of the pensionable remuneration for General Service and related categories after the review of the General Service salary survey methodology the following year was completed. CCAQ felt there was no need to change the grossing-up factor at the time and suggested the non-pensionable component should be examined in the context of the General Service salary survey methodology (CCAQ(PER)/84/Rev.1, annex IV). ICSC tentatively concluded that the income replacement approach and the related methodology should continue to be used for the determination of the pensionable remuneration of General Service and related categories of staff and that a working group should be set up to consider the non-pensionable component (ICSC/43/R.16, para. 69).
(76) Also at this session CCAQ discussed the special index for pensioners. As the preliminary documentation did not include any study of the success of the index in achieving the purposes for which it was introduced, its cost effectiveness or its impact on income-replacement issues, CCAQ urged that the existing procedures be maintained unchanged (CCAQ(PER)/84/Rev.1, annex IV). ICSC noted that the special index calculations appeared to be having their intended effect and concluded that no change should be made in the current procedures for calculating and applying the index (ICSC/43/R.16, paras. 104-105).
(77) At its 85th session (July 1996: ACC/1996/14, paras. 30 & 33-37) CCAQ decided to inform the ICSC that CCAQ did not wish the 46.25 per cent grossing-up factor for the pensionable remuneration of the Professional and higher categories to be endorsed for ever since the continued use of a different grossing-up factor (66.25 per cent) for General Service staff implied that income inversion could never be completely reduced. A common scale of staff assessment should, therefore, not be seen as a means of completely eliminating income inversion. Since the US federal civil service pension system had become increasingly diverse and comparisons of pensionable remuneration levels were becoming as a consequence both more complex and less meaningful, CCAQ decided to inform the ICSC that the procedures for pensionable remuneration comparisons with the comparator US federal civil service should be revised to allow for such comparisons to be made on an actuarial basis every five years. ICSC decided to recommend that the methodology for determining the pensionable remuneration of Professional staff should continue without change but that the monitoring of pensionable remuneration and the UN/US income replacement ratios should be carried out on the occasion of periodic comprehensive reviews of pensionable remuneration and the consequent pensions of Professional staff, with interim reviews every two years. At the time of the comprehensive reviews, the ICSC secretariat would carry out actuarial analyses of the pension benefits from the UNJSPF scheme and those of the comparator, in close cooperation with the Pension Board (A/51/30, paras. 54-55). The General Assembly adopted these recommendations (resolution 51/217 II, paras. 1-3).
(78) Also at the 85th session (ACC/1996/14, paras. 32-33) CCAQ reaffirmed its positions on the pensionable remuneration of the General Service and related categories and the special index. ICSC decided to recommend that the methodology for determining the pensionable remuneration of General Service and related categories of staff should continue unchanged but reported that it had agreed to the establishment of a joint ICSC/Pension Board working group to consider the non-pensionable component issue as part of ICSC's review of the General Service salary methodologies scheduled for 1997 (A/51/30, paras. 66-67). ICSC decided to recommend that the arrangements for the special index should be maintained unchanged (ibid., para. 122). The General Assembly adopted these recommendations (resolution 51/217 II, paras. 4-6, & III, para. 4).
(79) At its March 2004 meeting (CEB/2004/HLCM/14, para. 18) the HR Network agreed that the proposals by the ICSC secretariat appeared reasonable in that they constituted the regular six yearly review of pensionable remuneration by the ICSC. ICSC decided to propose to the UNJSPB the establishment of a joint working group for review of pensionable remuneration, consisting of staff drawn from the two secretariats and a time schedule according to which the Commission and the Board would jointly submit their recommendation to go forward to the General Assembly in the summer of 2006. The Commission also decided on the issues to be addressed during the review and agreed to add others proposed by UNJSPB (A/59/30, para. 181). The Assembly took note of the decision (resolution 59/268 I F).
(80) At its July 2005 meeting (CEB/2005/HLCM/27, para. 11) the HR Network agreed with the suggestion of the ICSC secretariat that the six-year comprehensive review of pensionable remuneration and consequent pension, normally due to take place in 2002, should still be deferred until such time as the results of the current pay and benefits review were known. The item was subsequently withdrawn from the ICSC agenda and postponed until 2006.
(81) At its twentieth session (CEB/2010/HLCM/HR/35, paras.27-30), the HR Network welcomed the long overdue review of pensionable remuneration; Supported the items proposed for review, in particular the income replacement ratio and the issue of double taxation.
(82) At the same session, the Commission decided that the following items be reviewed:
(a) The common scale of staff assessment;
(b) Income replacement ratios;
(c) Cost comparisons of the United States/United Nations pension schemes;
(d) Double taxation;
(e) Non-pensionable component;
(f) Impact of the steep devaluation of local currency and/or high inflation;
(g) Small pensions.
In addition, the Commission decided:
(a) To approve the work schedule as outlined in paragraph 85 of the Annual Report to the General Assembly (A/65/30):
“The Board was in agreement with the proposed working arrangements which, inter alia proposed that documents on the review would be first discussed during the Commission’s seventy-second session in spring 2011 where a representative of the Board would be present; additional work would be conducted and a final report would be discussed at the UNJSPB fifth-eighth session and later presented to the Commission at its seventy-third session in summer 2011 for final approval. This would be followed by a joint report of the Commission and the UNJSPB which would be submitted to the General Assembly.”
That the secretariats of the UNJSPF and the ICSC would meet informally and as necessary in order to complete the review in accordance with the working arrangements proposed in the document. The recommendations will be presented to the Commission at its seventy-second session, in spring 2011.
(83) At its twenty first session (CEB/2011/HLCM/HR/9, paras.26-30), the HR Network supported the recommendations of the report on Comprehensive review of the pensionable remuneration (ICSC/72/R.4) and will continue to engage in the process. The Commission presented its decision in report CRP.4/Add.3 (see Annex 6).