Dear Participants, dear Retirees and Beneficiaries,

The Fund’s Committee of Actuaries met in New York from 13 to 15 June 2022, when it considered the results of the latest actuarial valuation (at 31 December 2021). The Fund Solvency and Assets and Liabilities Monitoring Committee (FSALM) and the Investments Committee also met this week and all the committees discussed how the latest movements in the financial markets are impacting the Fund’s current solvency position. The Committees were reassured of the strong financial condition of the Fund.

As always, the Pension Board will have the opportunity to discuss the findings of the actuarial valuation report at its next July 2022 Board meeting. The usual practice is that the results of the actuarial valuation are published after the Board reviews the full report and discusses the results with the Consulting Actuary and Committee of Actuaries. 

However, in light of the current extraordinary circumstances, and after having duly informed the Pension Board, we would like to inform you that the 31 December 2021 actuarial valuation has reported a strong surplus:

• On an open group valuation basis, a surplus of 2.3% of Pensionable Remuneration (an increase from 0.5% at 31 December 2019)
• On an Article 26 (closed group termination basis), a funded ratio of 117% (an increase from 107% at 31 December 2019)

This result was fuelled by strong performance of the Fund’s assets in recent years reflecting the careful management of the assets by the Office of Investment Management. These results are also based on the actuarial value of assets – in other words, the solvency position of the Fund is measured using smoothed asset values, so the long-term management of the Fund is not distorted by short-term market volatility but reflects long-term trends. 

Even at the most recent market values of the portfolio, the Fund continues to be well-funded where the funding ratio is still higher and stronger than 2019, benefitting from the cushioning of the above surplus. The long-term time horizon of the Fund means we can manage the short-term swings of our asset values. 

The Fund has been able to achieve the investment return required to continue to pay our current and future beneficiaries in decades to come, and will continue to monitor its solvency through the biennial actuarial valuations and the four-yearly asset-liability management studies.

To understand better actuarial matters and have a historical perspective on the Fund’s valuations, please check this webpage.

Best regards,

Rosemarie McClean and Pedro Guazo

Rosemarie McClean is UNJPSF’s Chief Executive of Pension Administration

Pedro Guazo is the Representative of the Secretary-General for the investment of the UNJPSF assets