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The ILO Training Department 1960-1990 / George Kanawaty

In 1952, the ILO lunched a major field programme assisting member States in establishing centres for vocational training. This was followed three years later by another programme in productivity improvement through management training. Both programmes witnessed a rapid expansion for two reasons. First, many countries in the developing world had recently acceded to independence and human resources development was a top priority; Secondly, The UN system had just established a “Special Fund” aimed at financing technical cooperation programmes, the Fund later became “United Nations Development Programme” or UNDP. Hence to finance its training operations, the ILO could resort to UNDP, if financing was available. In the early 1960’s, both activities in vocational and management were put under one umbrella that of a “Human Resources Development” Department later changed to “Training Department”.

Pre-occupation with field operations was pre-dominant from the 1950’s to the early 1970’s. Headquarters staff was mainly involved in supporting field activities.

In the early 1970’s, the focus changed to make the training activities more relevant to changing needs. Thus apart from field operations, the Training activities encompassed other means of action such as research, publications, meeting and conferences. Activities were conducted through four branches, vocational training, management development, vocational rehabilitation and a newly created training policies branch, which apart from advising governments on national policies in human resources development acted as a think tank to steer the department activities in new directions such as those experienced as a result of structural adjustment or advances in technology.

New Directions:

In vocational training, modular training curricula were introduced, this allowed flexibility in the shift from one occupation to another, hence, for example, a trained electrician can change occupation to a specialist in car electric systems by attending a couple of training modules in that area. Six persons at headquarters worked on the development of training modules thoroughly illustrated for various occupations, financed by Germany, Sweden and Switzerland, who wanted these modules for their own proper use as well.

In management training, research led to the establishment of a new vibrant programme for small business based on new premises, linking training to financing and to advisory services on the spot, and developing specific training programmes for various sectors, such as small contractors, small retailors etc.  In the management area, rather than concentrating on the industrial sector as was the case, training was undertaken for managers in sectors such as construction, transport and services, all such sectors that were expanding in a period of development and adjustment. To take one example, when the famine hit Ethiopia in the 1980’s, Germany provided 500 Mercedes trucks to ferry food to the interior while the  ILO management development branch provided the logistic expertise needed to decide on routing, setting up fuelling, storage and maintenance areas, and fleet management.  Similarly,  management training in construction and transport were introduced with great success and financed by a multitude of sources.

In vocational rehabilitation, the term “ handicapped” used only for the physically handicapped, was redefined to encompass other symptoms such as alcoholics and those afflicted by drug addiction. This resulted in an expansion of activities and sources of funds readily available to finance them.

All these new directions, led to a vast expansion of the activities of the department which in the 1980’s became the largest ILO department or at least on par with the Employment Department, the other major ILO activity. In the 1980’s the training department employed 100 staff at headquarters and some 400 experts and consultants working in some 80 different countries.

Other activities presenting current pre-occupations:

It may come as a surprise to some that current challenges such as environmental issues, equality, changing working methods as a result of artificial intelligence and new work organization and job design were addressed by the department some 40 years ago.

Thus, the department introduced environmental training in its management programmes. This was not introduced as a separate programme, but as apart and parcel of existing programmes, for example, in production management training, introducing the notion of better job design  so as to reduce waste, the treatment and utilisation of waste, in marketing,  better packaging that are environmentally friendly and avoiding the throw away spirit in advertising and so on.   In Equality, a professional was appointed at headquarters whose function among others encompassed the vetting of all new projects to make sure that equality concerns are addressed and to include equality as an evaluation criterion.    In artificial intelligence, the department undertook a three years research to uncover what six leading countries in that area were doing in education and training for artificial intelligence and to provide guidance in that field. Two International meetings on training for artificial intelligence were held. The result of that work financed by Germany was published.   In new forms of work organization, Norway financed a three years experiment in transferring management working methods based on Norwegian, Swedish and Japanese experiences to two countries, India and Tanzania. The results were published in the ILO review.

Funding:

The training Department in the 1980 believed in diversifying its sources of funding rather than relying soley on the ILO and the UNDP.  Contacts were established with a number of donors. As a result, no less than ten governments contributed directly to the training department activities, be it in research or direct assistance to various countries. Furthermore, the department pioneered a new approach that targeted World Bank funded projects. To comply with the Bank’s preconditions, it entered into competitive bidding against various well-established consulting and training firms.  Preparing each bid required an expenditure of $20,000 to $30,000. If won this could amount to $2 to 4million dollars project, for which the ILO earned 10 per cent management fees. Entering bidding operations went on for a year, until the official green light was given by the top ILO management. This prompted other departments then followed that lead.

Some may wonder if these expanded activities and staff costs may not have constituted a burden on the ILO budget. In fact the opposite is true. The Training Department was a money earner for the ILO. To finance its staff, and other activities such as meetings, missions and so on, the ILO allocated $5 million yearly to the Department. The department generated over $ 8 million in revenue yearly. The volume of technical cooperation projects amounted to around $ 75 million per year, of which the ILO took as management fees anywhere between 10 and 13 per cent. This generated around $ 7 million as a conservative figure. But the department produced six of the ten best sellers of the ILO including numbers 1, 2 and 3, best sellers all in the management field. Annual sales revenue of these publications amounted to $ one million. The number one best seller was a 500 pages book with over 100 illustrations, called “Introduction to Work Study” of which George Kanawaty is the author of the revised editiion and deals with practical approaches to improving efficiency at work coupled with guidance to improving job satisfaction. That book sold some 300,000 copies. A record for any UN publication was translated in 8 languages including Russian and Chinese and printed under lLO license in 7 other countries. That book alone, which was updated a couple of times to include issues related to computerisation and robotics, generated over $12 million income to the ILO.

The end

In 1990, a new Director-General took over who decided to shift ILO emphasis to other activities, mainly the Declaration. This year coincided with my own retirement. The Training Department was then dismantled with its various components either eliminated, vastly reduced in size or so much merged with other activities, to make it un-recognisable. And so the curtain fell on the largest ILO department.

____________

The author, George Kanawaty, after serving nine years in ILO technical cooperation programs in Asia, Africa and the Middle East, became chief of the Management Development programmes at Headquarters from 1972-1980 and Director of the Training Department from 1980-1990.


Happy memories / Hans Hammar

100 years is an impressive age for an international organisation, and there are many reasons why the ILO has reached it: an important objective (social justice), a good structure (tripartism) and competent delegates and staff.

This is the moment to recall two great personalities in the ILO, who both had it all – competence, wit, charm and humour – namely Gullmar Bergenström and Francis Blanchard.

Gullmar, an impresssive 2 meter tall Swede with monocle and moustache, was the Employers` Vice Chairman of the Governing Body from 1969 to 1980.  He led the unruly Employers with a firm hand through the difficult years of the cold war, and worked well, but independently,  with three great Directors-General – Morse, Jenks and Blanchard. He convinced Jenks and then Blanchard to create a new employers’ program, combining relations and technical cooperation, and of course a corresponding, and  bigger, program for the workers. Jenks defended the proposal, as a logical consequence of tripartism – against the communist countries, but with the support of the (then) ICFTU (International Confederation of Free Trade Unions, social democratic). Blanchard took the organisational decisions and obtained the budgetary resources.

These were the difficult years of the debate on the “Structure of the ILO”. The debate tried to satisfy the communist countries in general and their “employers” in particular; the latter wanted to have guaranteed seats in the Employers’ Group of the Governing Body. In a GB election in the 1970ies, the communist employers only received around 30 votes, but you needed around 100 to be elected. The Soviet employers’ delegate, the charming Mr. Polyakov, asked for the floor and said angrily: “Mr. Bergenström, we the socialist employers have a democratic right to be elected to the Governing Body!” Gullmar took off his monocle and replied calmly: “Mr. Polyakov, let me inform you – with my somewhat longer experience of democracy than you have – that you have a democratic right to STAND for elections, not to be elected!”  Mr. Polyakov was not convinced…

The fall of the Berlin wall in 1989 changed it all: now the Russian and other East European employers – as well as Chinese! – are elected democratically to the Governing Body. And the staff of their new organisations are trained by ACTEMP (Bureau for Employers’ Activities)…

It was a pleasure to work under Francis Blanchard, competent, extrovert, charming – and witty! In 1982 he accompanied the Pope John Paul II during the Conference to visit the three Groups, separately. Three catholic secretaries of ACTEMP had asked to be allowed to attend. When the Pope came to them, he turned to Mr. Blanchard, and asked:     “M. le Directeur Général, ces charmantes jeunes dames, est-ce qu’elles sont vraiment des employeurs?”  Mr. Blanchard replied, without hesitation: “Oui, Votre Saintété, des employeurs clandestins!”  The Pope smiled, and blessed the ladies…

Those were the days…


A Life-changing Experience / William Mellgren

I started working for ILO as a Consultant, and later CTA, in !981. Initially, I led a Small Enterprise Development Project in Cameroon, one of the most varied and beautiful countries I have known. After project finding missions to Central African Republic and Haiti, I came to Dhaka in Bangladesh, as Employment Promotion Advisor for a Project led by AMAH Siddiqui, an inspiring leader for all of us.

It was soon clear, that employment-creation in large numbers could only be achieved in the informal sector, especially in the rural areas where 70 % of the population lived. BMET, our counterpart, had started a microcredit scheme based on the promising experiences of Grameen Bank, BRAC and other NGOs. When visiting the borrowers, I was very impressed by what it had achieved: for instance a man who had purchased a young cow with the loan, had now two cows, milk for the family and for sale, had replaced his hut with a real house! But what he most stressed was that he was recognized by the villagers and gained a dignity…

We started working with local banks and the BMET officers went out to the villages to organize and select the borrowers, distribute the loans after compulsory savings by the candidates, etc.

A second and larger Project was launched in 1988 until 1992, based on the experiences of the first. I was able to lead a new Project on similar lines in Pakistan, until my retirement in 1999.

As an enthusiast of microfinance, I launched a mini-NGO, Community Uplifting Foundation, when I met Martial Salamolard in 2005, who had started opening schools in Bihar and Calcutta for the vast numbers of Indian young children without schools, or Govt. schools with absentee teachers. Martial was soon convinced that Swiss funding for Ecoles de la Terre in India was not sustainable and specially breeds dependency among the beneficiaries!

With the aid of an Indian specialist, Dr. Pradip Har, we launched a microcredit scheme among the mothers of our school children in 2009 and other mothers in those villages. In early 2018, we have more than 35,000 outstanding loans and keep 100% loan recovery, thanks to careful selection and training of the candidates and close weekly supervision! Also, nearly one fourth of the costs of the schools are funded with the interest collected from the borrowers.

Only women are accepted as candidates, to ensure their earnings benefit the whole family and lifts the status of the mother within the family and the local community, which is traditionally quite low…

Much more can be told about this very satisfying experience of helping the needy women and children in India, and it will be a pleasure for me to provide further information on all this!


ILO Art Circle’s 2018 exhibition

Category : Archives

Friends of the Arts and Decoration Circle of the ILO came in large numbers – about a hundred people – to participate in the opening of the exhibition held from 17H00 to 19H00 on Tuesday, 2 October 2018 in the ILO Hall of Colonnades. The location of the exhibition is remarkable due to its large windows, letting light filter in unrestricted, and in being a busy passageway giving an opportunity for the artworks to be viewed by the greatest number of people possible. It was a great event and the participants were able to wander through the Hall of Colonnades and discover the fruit of the work of the 19 exhibiting artists. The name “Arts and Decoration Circle” has really been justified this year by the variety of works presented; abstract and representative paintings and pictures, sculptures, faience painting, jewellery and floral decoration (the latter courtesy of Madeleine Hamilton, Madeleine Brandt and Gudrun Jesse).

At the beginning of his address, François Kientzler, President of the Circle, gathered the exhibiting artists around him. After welcoming the guests, he recalled that the exhibition was the result of the work done by the artists of the Circle over the past months and that the exhibition was a privileged moment to present it. Artists often work in isolation, even in secret, and such an exhibition is an opportunity for friends and family to gather and share the artists’ pleasure and pride in their work.

Then the President thanked all those who participated in the preparation of this exhibition and allowed its realization, in particular the ILO’s DCOMM Service in charge of internal and external communication, Ms. Kiran Mehra-Kerpelman, Alexander Belopopsky and Marcel Crozet. The INTERSEV Services, FACILITIES, SECURITIES are also key elements in the organization of the exhibition with the final authorization being given by Mr. Guy Ryder, Director General, who permits the exhibitions to take place in the ILO. The President mentioned the three people exhibiting for the first time this year, two of whom are still working in the ILO. He warmly welcomed the opening up of the Circle to younger artists, which in his view confirms the interest in the Circle’s exhibitions. Five years ago when the Circle was rejuvenated, it was far from certain that it would be a success  but every year there is another step up in the quality of the exhibited works – which was also the general opinion of the guests present. The Circle currently has about 35 members.

Next year, 2019, will be the ILO’s centenary year. The Director General would like ILO retirees to participate in this event. The Bureau of the Section of Former ILO Officials, in meetings with the representatives of the administration, expressed the interest of the ILO Arts and Decoration Circle in contributing to the Centenary at some point during 2019.

In conclusion, the President thanked all the participants for their presence, which he emphasised is a great encouragement to the Circle to continue its activities and development. He wished everyone good luck in this exhibition and invited them join him for a drink in the Espace Gobelins. It was a very convivial moment shared between friends.


Activities report 2018

Category : Archives

The Former Officials’ Section has a 10-person executive Bureau (one post is currently vacant) which, except during the summer months, generally meets every two weeks. Its office (# 5-67) is next to those of the Staff Union on the fifth floor. Although the Section keeps in touch with its members by email, post and its twice yearly bulletin Message, as well as via its website (http://www.anciens-bit-ilo.org), there is still considerable room for improvement if it is to maintain close contact with retirees in the various regions.

Thanks to the Section’s physical proximity to the Staff Union, its Secretariat, its Executive Secretary and the other members of the Bureau are able to maintain permanent contact and engage in regular cooperation with the Union. These exchanges concern mainly matters of mutual interest, such as the SHIF and the Pension Fund. The Section supported the Staff Union’s crusade against salary cuts in Geneva and welcomed the broad mobilization of the staff during the spring of 2018.

The functioning and maintenance of the Staff Health Insurance Fund (SHIF) is a constant subject of concern and one which crops up at each of the Section’s fortnightly meetings. And there seems to be every reason to be worried, what with the risk that the processing of claims could be farmed out to an outside agency and that the social protection of retired officials could be transferred to national schemes – which in many countries do not even exist. Eager though we are to see an improvement in the Fund’s governance and management and in the social protection of retired officials in the various regions, we were also pleased to see the improvement in certain benefits on 1 July 2018 in terms of prevention and of the recognition of certain alternative medicines.

The Pension Fund, too, is going through a turbulent patch, not so much for reasons of finance or efficiency but rather because of a number of internal problems that are hardly conducive to a serene work environment. The Fund has introduced a new integrated computer system, and as a result some newly retired officials have had to wait months for their first payment; fortunately, current payments to retired officials have not been affected.

 

The Section has continued to work on improving its communications with retirees. Its website (http://www.anciens-bit-ilo.org) is regularly updated, not just with information that is of direct concern to retirees but also with the latest news from the ILO, such as the Staff Union’s recent crusade and strike action mentioned above. At the same time, we are busy preparing the next issue of Message, which is eagerly awaited by a large number of retirees but which involves a lot of time-consuming work. We are sincerely grateful to all those who devote their spare time to the magazine and are always on the lookout for new volunteers to help with translation and proofreading and to write articles or provide documentation.

The Former Officials’ Section always takes part in the annual pre-retirement seminar, where we can spend a few minutes with each participant so as to establish a personal contact with future retirees and encourage them to join the Section.

We are also involved with similar associations of other international organizations in Geneva, and a seminar under the heading “Comment bien vieillir – Stay younger for longer” was held on 14 May 2018 in the ILO’s Governing Body Room in cooperation with the former officials’ associations of WHO, the United Nations (AAFI-AFICS) and the ITU. The working documents for the seminar are available on our website (http://www.anciens-bit-ilo.org). Following a presentation dealing with the normal and pathological impact of ageing on mental health, interventions were heard from associations belonging to the “Plateforme des Ainés de Genève”: Pro Senectute, the Geneva Red Cross, the Geneva home-care assistance institution (IMAD) and Cité Seniors (on the Swiss side of the border) and the gerontological information and coordination centre (CLIC) in the Pays de Gex (on the French side).

The Seminar was attended by 200 participants and was the product of several months’ sustained collaboration among associations of retired officials of international organizations in Geneva. The previous seminar of its kind, on loneliness and isolation, was held in October 2014, and we believe that events such as these show how useful such associations and groups of retirees can be.

As we prepare to mark the hundredth anniversary of the ILO in 2019, which is sure to be a memorable occasion, hundreds of tributes and other events have been planned to be held in Geneva and throughout the world. No doubt they will be closely followed in the media.

The Section is cooperating with the ILO as it prepares for the centenary celebrations, and the Director-General Guy Ryder has personally expressed the hope that former officials, who were the making of the Organization, will follow the event very closely. On two occasions in the first half of this year the Section met the ILO officials who are responsible for arrangements and it has been very pleased to be of help. Though the date has not yet been fixed, a special event will be held for retired officials in the presence of the Director-General. The Section has made a number of suggestions for the occasion that have been duly adapted for inclusion in the general programme of events.

In a circular sent out on 30 January 2018 the Section invited retired officials to send in contributions reliving some of the highlights of the ILO’s history and the response has been encouraging, with over 40 contributions already. Some of the stories appeared in the June 2018 issue of Message, and others will follow. All these contributions will appear on our website (http://www.anciens-bit-ilo.org), as well as being passed on to DCOMM for use in their communications as they see fit.

The Former Officials’ Section also supports the ILO’s Arts and Decoration Circle, a member of the Sports and Leisure Association, whose some 30 plus members organized a fourth exhibition in the Colonnade at ILO headquarters from 1 to 12 October 2018.

The annual receptions for retirees that take place in May and December in Geneva at the invitation of the Director-General are an excellent occasion for former ILO officials to meet up on familiar ground, and the Director-General’s attendance is always greatly appreciated.


SHIF: Settlement between ILO and the ITU

Category : Archives

UPDATE FROM THE DIRECTOR-GENERAL
18 July 2018

Dear colleagues,

I am writing to inform you of the outcome of a matter relating to the withdrawal of the International Telecommunications Union (ITU) from the Staff Health Insurance Fund (SHIF).

Following the ITU’s unilateral decision to withdraw from the SHIF and to provide health and accident insurance to its staff and retirees via a third party, a difference arose as to the share of the net assets of the SHIF, represented by the SHIF Guarantee Fund, that should be attributed to the ITU. In accordance with the agreement between the ILO and the ITU, the matter has been decided through arbitration.

The decision is that US$8.9 million of the $61 million available in the Guarantee Fund as at the date of ITU’s separation in May 2014, be transferred to the ITU together with a provision for interest calculated at 1.4 per cent per annum.

The ITU had initially claimed an amount of $18.6 million against the ILO’s figure of $1.8 million representing the net difference between contributions received in respect of ITU insured persons and benefits paid. The ILO’s proposal also reflected the accounting practices and audited financial statements that had been unchallenged by the governing bodies of the two organizations throughout the ITU’s association with the Fund.

The Arbitrator decided that in the absence of any clear legal basis to distribute the net assets, the distribution should be based upon the solvency parameters of the Guarantee Fund as established in the SHIF Regulations.

The transfer of these funds has had no immediate impact on the financial stability of the SHIF. It continues to be appropriately funded and to deliver insurance coverage to ILO insured persons. An actuarial study is being commissioned in order to review the medium to longer term financial outlook.

Guy Ryder


Photos of May 2018 reception of former officials

Category : Archives

The photos of May 2018 reception of former officials are online! Thank you to the photograph, our colleague Jacques Rodriguez.


Spring 2018 reception

Category : Archives

On Thursday, May 17, 2018 in the late afternoon was held the spring reception of retirees of the ILO at the invitation of Guy Ryder, Director General. Many colleagues had responded, as usual, to this invitation a few days before the start of the 2018 International Labor Conference. The Director-General honored the reception with his presence and had the opportunity to greet many former retired colleagues.

Mark Levin, Director of HRD, greeted the retirees present and gave the floor to Mr. François Kientzler, Executive Secretary of the ILO Elders Section. In his speech, he mentioned a recent ILO Seminar on “How to age well”, which brought together some 200 ILO retirees and other international organizations in Geneva. In particular, this Seminar benefited from the expertise of former WHO retired medical officers. All of the work will be published and available to everyone, including on the Alumni Section website. He then referred to the ILO’s centenary by thanking all those who had already given a testimony about a notorious event they had experienced. This information will be shared with the ILO Communication Service (DCOMM). Two working meetings have already been held at the beginning of the year with the ILO officials responsible for coordinating the Centenary events and the Section of Elders is fully integrated into the process. It will keep retirees informed of any events affecting them.

In his intervention, the Director-General recalled that the general objective of the ILO Centennial was to look to the future and, in particular, to future employment and work. He recalled that the ILO has constantly adapted to the often profound changes in the world of work and that the retirees present have been actors. It is now up to the ILO to look to the future and adapt its resources to the new demands of the profound changes in technologies that change labor relations. But without forgetting all those who are outside these transformations in developed and developing countries. On the occasion of the ILO Centenary in 2019, many events will be held in Geneva and around the world, including a meeting of a United Nations and Swiss Federal Government forum. Regarding the requirements to which the ILO itself is subject, it quoted the duration of the International Labor Conference, which is only two weeks long whereas in the past it lasted up to five weeks. He also mentioned a recent staff strike at the March Board meeting, recalling that this is part of the life and working relationships of any company, so it can happen even at the ILO. In conclusion, he thanked all present for their continued interest in the future of the ILO.

The reception was an opportunity to exchange with friends but also, for many of us, to make new acquaintances. For the members of the Bureau of the Alumni Section this was an opportunity to meet and talk with many retirees. It is also our responsibility to mention the participation of several DCOMM officials in this reception who were able to interact directly with ILO retirees in preparation for the ILO Centenary.

Photos album

Note:

The next reception will take place on Thursday 13th December 2018


A word from the Executive Secretary – June 2018

Category : Archives

We are fast approaching the 100th anniversary of the International Labour Organization in 2019, and it promises to be a landmark year. Hundreds of events, both here in Geneva and globally, are planned to mark the occasion, which we hope will have wide coverage in the media.

For decades, ILO retirees have made their contribution to the ILO by participating in the implementation of its goals throughout the world. In our circular letter of 30 January 2018, we asked you to contribute by recalling moments in this history, and many of you have already answered the call. Some of these recollections feature in 63th issue of Message and others will be published later; all contributions will be put on our website (anciens-bit-ilo.org). As noted in the circular, we will also transmit your responses to the ILO’s Department of Communication, which will be able to integrate them into specific communication topics.

Mention of this topic affords me the opportunity to tell you that we are working closely with various branches of the ILO in connection with the preparation of events for the Centenary, and Director General Guy Ryder has expressed the wish that former officials, who shaped the Organization, should be fully involved. We are delighted to have already had two meetings in the first half of the year with the ILO officials in charge of the Centenary. Although we cannot give you a precise date at the moment, a milestone event will be held for retirees which will be attended by the Director General. We submitted a number of suggestions that have been adapted and integrated into the general programme of planned events. As soon as the timetable has been finalized, you will all be informed, especially those of you who reside some distance away.

This start of year has been an intensely busy one for the Former Officials Section. In addition to our regular activities, 14 May saw us holding a seminar in collaboration with other international organization retirees, which brought together some 200 participants on the theme “Stay younger for longer”. We hope you will all be able to benefit from the results of this event, which we will be posting on our website as well as sharing via mail. The spring reception held on 17 May in the presence of the Director General was the usual resounding success.

This spring, the SHIF sent out new amendments to the Regulations and Administrative Rules that take into account some of the long-standing demands of retirees. Be especially aware of the codes set out towards the end of the Schedule of Benefits, which incorporate coverage of new procedures such as vaccinations, preventive screenings and alternative medicines.

Let me conclude by drawing your attention to recent action taken by the Staff Union, including the staff coming out on strike to defend the status of the international civil service after the recommendation of the ICSC (International Civil Service Commission) to slash salaries in Geneva, and the ILO Governing Body’s decision to implement it.


Latest news of the Pension Fund (June 2018)

Category : Archives

Four representatives from the Pension Fund, including the Deputy CEO Paul Dooley and the new RSG Sudhir Rajkumar, briefed Pension Committee representatives of the participating organizations in Geneva (including staff and retiree representatives) on 4 June 2018.

The message was broadly positive although there were also notes of caution concerning the active to retiree ratio (from 3.12 to 1.6 in 2017) and the US $ 300 million excess in 2017 of benefit payments over pension contributions received. This places even greater importance on investment returns to maintain the health of the Fund.

 Human resources

The human resources situation is certainly mixed as the CEO Sergio Arvizu has been on long-term sick leave since August 2017 and is unlikely to attend the next Pension Board meeting at the end of July. The Deputy CEO is retiring from his post at the end of August 2018 (the candidate to replace him should be presented to the Pension Board at the end of July) and the Chief Communications Officer is also leaving at the end of June 2018. On a more positive note the Secretariat of the Pension Fund was granted 4 additional posts last year and all (previously) vacant senior staff positions were filled.

The new RSG responsible for investments, Sudhir Rajkumar, started in January 2018. He has 29 years of broad-based global investment experience with the World Bank and the International Finance Corporation and immediately prior to becoming RSG was head of the pensions investment advisory programme at the World Bank Treasury. Despite identifying in his first few months in office a need for additional staff to deal with the increasingly complex and challenging investment environment the number of posts in the investment division is fixed until 31 December 2019.

Operational issues

Mr. Dooley reported that in recent years the Fund has introduced a number of improvements in client services: call centre, member self-service, liaison office in Nairobi, expanded outreach activities and a new web site. An office in Bangkok, similar to that in Nairobi, is also being considered.

Currently the Fund is processing 80% of all claims within a month of receiving them (the median processing time for new claims is 12 working days) and 80% of emails are handled within 15 working days. The aim is to process 75% of all claims within 15 working days so there is still some way to go to achieving the target. He mentioned that the Fund is keen for more retirees to avail themselves of the self-service function and will be conducting an information campaign to encourage people to use the system, which is intended to improve the Fund’s ability to provide a better service to all its members.

Financial health of the Fund

The Fund currently serves 205,000 members: 127,000 participants and 78,000 retirees. The number of retirees is growing faster than active participants (increased by 86% since 1998 as opposed to 76% growth in active participants) and as already mentioned, the payments annually exceed contributions. For the Fund to remain sustainable it must achieve an annual real rate of return (i.e. net of inflation) of 3.5%, which historically it has done except in the last 10 years due to the 2008 financial crisis. The good news is that the investment return in 2017 was a healthy 16.5% – well exceeding the target – but the RSG noted that markets have been volatile in 2018 and there are always peaks and troughs in the returns on financial investments so it is important to be vigilant and certainly not be complacent. He reported, however, that the value of the Fund had remained stable since the beginning of 2018 and as of 31 March 2018 stood at US $ 64.2 billion.

What to watch for the future

  • Impact of Environmental, Social and Governance (ESG) investments strategy: You may have seen the article in which the Guardian criticised the Fund for investing in companies involved in bribery and major environmental damage. This issue was tackled head on by the RSG who stated that the Fund is fully committed to responsible investing and that although the Fund does not discuss individual investments it publishes its policy on ESG investments on the website. It further intends to publish its strategy on sustainable investments. It should be reminded that the Fund does not invest in either tobacco or armaments securities.
  • Office of Internal Oversight Services (OIOS) Audit Report 2017/104: The DCEO informed the meeting that there were 16 audit recommendations to be implemented, of which he said five are critical issues.
  • Office of Internal Oversight Services (OIOS) Governance Review: The OIOS has started a review of the governance structure of the Fund. No information was given at the meeting concerning the timetable and process of the Review.
  • Impact of salary reductions and International Civil Service Commission (ICSC) review of pensionable remuneration: This issue was not raised during the meeting but may become increasingly relevant in coming years. Although recent salary reductions applied only to professional staff stationed in Geneva if salary reductions in other areas were on the cards contribution revenue could be adversely impacted. And the ICSC review of pensionable remuneration in the ICSC 2017-2018 programme of work could also impact (either positively or negatively) on the sustainability of the Fund depending on the outcome.

More information about the senior staff, and operational and financial status of the Pension Fund is available in the most recent UNJSPF newsletter: https://spark.adobe.com/page/QYMPhPeAGRclH/