Photo Credit: ESCAP Photo/Caio Perim

The United Nations Joint Staff Pension Board has concluded its 78th session, in which it considered issues related to the performance and governance of the United Nations Joint Staff Pension Fund (UNJSPF), the UNJSPF actuarial and financial situation, individual elements of the benefit system, the proposed administrative budget for 2025, and the annual reports from the United Nations Board of Auditors and Office of Internal Oversight Services (OIOS).

The meeting was held from 29 July to 2 August at the United Nations Conference Centre. in Bangkok, Thailand in a hybrid format, with both in-person and remote participation, co-hosted by the Economic and Social Commission for Asia and the Pacific (ESCAP). Below is a summary of the main discussions and decisions.

Performance of the Fund

Ms. Rosemarie McClean, the Chief Executive of Pension Administration, provided an update on the Fund’s operations, sharing key financial and demographic data, and insights into performance, strategic outlook, system modernization and resourcing priorities for 2025. She noted the Fund met or exceeded performance targets despite a 4.3% client base growth in 2023, making progress in client experience and modernization of pension services, including efforts to improve first benefit payment processing. She highlighted a modest increase in the budget for 2025 for modernization initiatives and underscored the Fund’s commitment to excellence, innovation, and client-centric services.

Mr. Pedro Guazo, Representative of the Secretary-General (RSG) for the investment of the UNJSPF assets, emphasized that UNJSPF was in a strong funding position, with its portfolio performing well and delivering consistent short- and long-term returns at conservative risk levels. The long-term 15-year real rate of return was 4.9 percent, significantly above the minimum goal of 3.5 percent, while the short-term 3-year return matched the market benchmark. He highlighted the goal to continue enhancing the Office of Investment Management’s capabilities and resources to navigate an increasingly competitive and complex investment landscape.

Actuarial matters

In accordance with the Fund’s Regulations and practice, the Fund’s Consulting Actuary conducts an actuarial valuation every two years to assess whether future assets will be sufficient to cover future pension liabilities and confirm the ongoing solvency of the Fund.  The Board was briefed on the outcome of the thirty-seventh actuarial valuation of the Fund as at 31 December 2023.  This actuarial valuation revealed that the Fund remains in a strong position, with a small surplus reported when considering the sufficiency of the current contribution rate.  When valued on a closed group basis, the actuarial valuation reported a funded ratio of 111 per cent, including assumed future cost-of-living adjustments. The Board also considered trends and risk factors that could impact the long-term solvency of the Fund, which will continue to be closely monitored to ensure our client benefits remain secure.

Financial matters

The Board endorsed the UNJSPF 2025 budget, which will be submitted to the United Nations General Assembly for final approval. The Board also approved the UNJSPF financial statements for the year ended 31 December 2023, after the United Nations Board of Auditors (BoA) issued an unqualified audit opinion on the statements. The 2023 financial statements will be submitted to the United Nations General Assembly and will be available on the UNJSPF website.

Elements of the benefit system

The Board considered the report of the Plan Review Group and decided to recommend that the General Assembly adopt various simplifications and clarifications to the Regulations and Pension Adjustment System to facilitate the administration of benefits, which do not change the nature of benefits under the plan. The Board also approved simplifications to the Fund’s Administrative Rules.

The Board endorsed a proposal presented by UNJSPF Pension Administration for an ad hoc adjustment to the small pension scale, subject to the approval of the General Assembly. Additionally, the Board received its regular update by UNJSPF on the impact of currency fluctuations on local currency track benefits paid in countries where most retirees, who opted for the two-track under the Pension Adjustment System, reside.

Audit matters

The Board took note of the strong commitment of the Pension Fund’s management and staff to the audit process and the positive evolution of the implementation of audit recommendations. This audit period was the last for the Board of Auditors (BOA) of Chile, after serving as external auditors from 2018.  The Board expressed appreciation for quality of the BoA Chile audit work during its tenure.

In regard to the activities of the Office of Internal Oversight Services (OIOS) for the period 1 July 2023 to 30 June 2024, the Board welcomed the progress in the implementation of audit recommendations and the positive interaction between OIOS and the Fund’s management, and the progress in the implementation of audit recommendations.

Governance matters

The Board reviewed the application for membership submitted by the Organisation for the Prohibition of Chemical Weapons (OPCW) and agreed to recommend to the General Assembly that OPCW be admitted to membership in the Fund, effective 1 January 2025. In accordance with Article 3 of the Fund’s Regulations, OPCW’s admission is subject to approval by the General Assembly and the fulfillment of certain requirements.

Next Steps

The Board will submit its report on its 78th session to the United Nations General Assembly in the coming weeks. The Board’s report is expected to be published in September 2024.