Photos of the Spring 2017 reception of former officials

The photos of the Spring 2017 reception of former officials are online! Thank you to the photograph, our colleague Jacques Rodriguez.

Meeting of the Bureau of the ILO Former Officials Section with Guy Ryder, Director General, accompanied by Mark Levin, Director of HRD, Thursday 30 March 2017

Presentation of the Former Officials Section

At the beginning of the meeting, François Kientzler, Executive Secretary of the ILO Former Officials Section, thanked Guy Ryder, Director General, for his invitation, and congratulated him on his re-election for a second term as head of the International Labour Office (a letter of congratulation had already been sent to the DG by the Bureau of the Section in November 2016). Mentioning the fact that retired staff are invited to a reception twice a year, he emphasized that these events and the DG’s personal presence at them are much appreciated by those taking part.

The Executive Secretary introduced the members of the Bureau of the Section (with the sad exception of one member who passed away in 2016, Clément Roche): namely himself, François Kientzler, Executive Secretary; Ivan Elsmark, Assistant Executive Secretary; Abdoulaye Diallo, Assistant Executive Secretary; Venkataraman Narasimhan, Treasurer; Bert Essenberg, Assistant Treasurer; Kitty Hooton, Liz Sommaro, Cherry Thompson-Senior and Jean-François Santarelli.

In a brief presentation, the Executive Secretary recalled the objectives and activities of the ILO Former Officials Section. Established in 1982, it had once numbered a former Director General, Francis Blanchard, among its members. The Section encompasses every retired staff member, using a personal approach to address specific challenges and issues, as well as the ILO retiree community as a whole through more collective actions and events. Its involvement in the Office’s pre-retirement seminar is thus invaluable given the stress that leaving the world of work can often cause, sometimes with a profound impact especially on family and personal life. The seminar enables future pensioners to obtain individual advice.

Most of the Section’s activities are aimed at retired staff members. Issues around health protection and insurance, pensions and taxation are its central concerns. Coordination is ongoing not only with the Staff Union Committee but also with other retiree associations such as those of the UN and WHO. Officers of the Section respond to requests and personal cases on the basis of their specialisms, with annual information meetings on these various issues being held in Geneva. Ivan Elsmark gave a presentation on the Section’s publication, Message, the very strong link with ILO retirees across the globe. The contents range from substantive articles on all these issues to more historically oriented pieces written by former officials, as well as practical advice on prevention topics and everyday life. Lastly, the Executive Secretary referred to the Section’s new website (http://anciens-bit-ilo.org/en/home/), which offers an alternative means of communication with retired staff members. The site includes relevant information on the activities of the Section and current issues (social protection and pensions in particular) and features a selection of photos of events like receptions and information meetings. It also provides direct links to a number of other useful sites, such as those of the SHIF and the Pension Fund, as well as a PDF copy of every issue of Message published to date.

Following the presentation of the aims and activities of the Section, the Director General addressed the various points raised. Concerning participation in receptions, he noted that this reflects retired staff’s interest in the future of the ILO in the context of profound changes in our economies and societies. It also shows their loyalty and attachment to the Organization, which he welcomed. Moreover, it was always a pleasure for him to share a glass with former colleagues. He commented on the activities of the Section, noting the role we play in being present at the time of retirement and our ongoing work with retirees. He expressed appreciation for our publication, Message, particularly the article in the latest issue (No. 61, March 2017) shown him by the editor, Ivan Elsmark, on the relationship between Germany and the ILO during the 20th century, which had seen some very dark periods.

Staff Health Insurance Fund (SHIF)

The most crucial point of the meeting was the situation of the SHIF. Recalling that retired staff feel an attachment to the Fund, the Executive Secretary noted that social protection had been an important achievement both for working people and populations in general. He referred to the fact that health protection and health insurance schemes are coveted by commercial operators which see them as potential sources of the same kind of financial profit that many pension funds already offer. But the ILO is bound to defend the principles of insurance and solidarity in a social protection that covers the population as a whole. Although the SHIF has had some difficulties in recent years in terms of service delivery and governance, improvements have been made. Doubts had arisen among many Fund members. He welcomed the recent integration of prevention aspects into SHIF policy, especially with regard to cancer detection and vaccinations, and recalled the difficulties in controlling expenditure related to hospital costs in Geneva.

After discussing retired staff’s concerns and hopes for the future of the SHIF, the Director General indicated that his perception was much the same as that expressed by the Executive Secretary of the Section. Good coverage and healthy finances are both essential. These are inescapable principles for the ILO’s health protection scheme. However, there are strong constraints, he said, such as his responsibility for sound financial management of the Fund and ensuring a high level of efficiency and effectiveness. Although there will be no growth in the ILO’s budget for the next biennium (2018-19), the DG will propose an increase in resources to the GB to strengthen the SHIF secretariat. The efficiency and effectiveness of the SHIF must be improved, and it was his responsibility to ensure its management is transparent and free of cost overruns or fraud. Thus, as also stressed by the Executive Secretary of the Section, he continued to pay close attention to improvements in cost control, in particular around hospital costs, which are very high in Geneva and require greater transparency. For Jean-François Santarelli, also current chair of the SHIF Management Committee, a joint approach with the UN and WHO health funds should lead to positive results in this area.

With particular regard to the implications of the implementation of certain recommendations related to the UN’s ASHI (After Service Health Insurance) programme, the DG felt they would have a very high impact on the ILO’s finances. Since this question was submitted to the GB in 2016, the Office is not yet in a position to act on it.

During the exchanges on this issue of health protection, Abdoulaye Diallo mentioned the difficulties experienced by retired colleagues in the regions. Unlike those residing close to headquarters in the Geneva area, they often find it difficult to make their voices heard by the heads of local and regional offices. Efforts should be made to accommodate former officials’ needs and follow up their medical claims. Referring to a recent specific situation, the Executive Secretary raised the issue of the Staff Welfare Officer’s role in respect of retired staff. It is not clear whether or not she is in a position to advise them if they ask her for help, given that her options for intervention are often limited to steering them towards the appropriate service. Finally, in connection with SHIF transparency, Liz Sommaro recalled that misunderstandings could be avoided if the Fund published its annual financial reports within the stipulated deadlines (none published since the one for 2012). The DG took note of these points.

ILO Centenary 2019

The ILO Centenary celebrations constituted the third item proposed for this meeting with the Director General. On behalf of the Bureau of the Section, the Executive Secretary began by presenting the DG with one of the medals produced and distributed to officials for the ILO’s 50th Anniversary in 1969. The DG warmly thanked the Section for this gesture, and raised the possibility of producing a medal for the Centenary. The Executive Secretary then put forward four suggestions that the Section had come up with so far for the commemoration, which do not preclude other proposals. They were (1) a special issue of Message on the Centenary, which could comprise either articles already published or new ones; (2) a conference on the theme of the ILO Centenary; (3) a lunch like those held on the occasions of the 90th and 95th anniversaries; and (4) an exhibition by the Art and Decoration Circle of the ILO on the theme of the Centenary. The Executive Secretary suggested that these events could be organized in coordination with those of the ILO.

Reacting positively to these proposals, the Director General mentioned the programmes planned to date in relation to the Centenary, in particular the “Global Dialogue on the Future of Work We Want” initiative, which is its central element. As of now, 150 countries have entered and engaged in this process and a Conference was being scheduled in Geneva on 6-7 April on this theme. In the DG’s view, in fact, we are witnessing profound changes in what we mean by work in the years to come with the development of the Internet, information technologies, robotics, etc., and the structural changes this entails for work organization and production as well as governance. What will the jobs and work of tomorrow be? This is the central thrust of the Centenary celebrations. A publication on the history of the ILO is also in the pipeline. This book would be targeted not only at an academic audience but also a wider public. The celebrations will involve national authorities as well as the tripartite constituents and sister organizations.

The DG welcomed the proposals made by the Former Officials Section and hoped there would be coordination to ensure that events do not overlap and that those planned by the Section can dovetail with those scheduled by the ILO. The possible participation of the Section in a Centenary coordinating body was raised.

The meeting concluded with the traditional photo of the DG with the members of the Bureau of the Section.

François Kientzler, Executive Secretary, ILO Former Officials Section, 31 March 2017

• Photo album photo of the meeting
  
  

UNJSFP – 2017 Communications

Newsletter – December 2016

Presentation of the CEO of February 2017 about the situation of the Pension Fund

After-service health insurance: Update

329th session of the Ilo governing body, March 2017

To read the document, download the PDF

Taxation – Recent communications

• Taxation of MEC accounts

Communication from the President of the Board of Directors of the MEC concerning the taxation of accounts of the MEC (October 2016).

To read the letter, download the PDF document

• France Taxation – Declaration of foreign accounts

Circular of the “Ministère de l’économie et des finances” of the 14th of September 2016

To read the circular, download the PDF document

UN General Assembly takes action on Pension Fund

Following a two-year campaign by staff unions over grave concerns regarding the governance of the Pension Fund and its performance in operations and investments, the UN General Assembly has at last taken action. Passing a resolution (No 71/265) at the end of 2016, the General Assembly has clearly reasserted the UN Secretary General’s primacy over the Fund, confirming the role of the Office of Internal Oversight Services and endorsing the use of existing internal capacities rather than consultants in the operations of the Fund. The resolution further calls on the Fund to improve performance, diversify investments, and minimise foreign exchange losses. It strongly rebuked the Fund administration for allowing key posts in the Investment Management Division to remain vacant (potentially a contributing factor in the underperformance of investments?) and for failing to pay new retirees on time.

The resolution is seen as a first step in addressing the problems besetting the Fund, particularly changes proposed by the CEO, which could have moved the Fund away from UN oversight to an environment potentially more prone to risk, corruption and exploitation by external management companies. Key posts – the heads of investment and risk management – had been vacant for over a year and no performance evaluation of the head of the Fund’s Investment Management Division, had been included in the most recent report on the Fund. Given concerns about performance of the Maryland State Pension Fund during the Chief Investment Officer’s tenure, the vacant key posts and the failure to meet the target of 3.5% annual average return (actual returns since 2014 have been below 2%) this was seen as an important issue.

The UN Pension Fund Board, citing the most recent actuarial report, confirmed in July 2016 that the Fund had a small surplus and would not need to dip into capital for the next 50 years providing the Fund can maintain a 3.5% annual average return – Watch this space!

Resolution 71/265 (PDF)

Dakar : former ILO officials residing in Senegal met to set up an Association

On the margins of the farewell ceremony organized for Djibril Ndiaye on 3 November 2016 on the occasion of his retirement, former ILO officials residing in Senegal met to set up an Association in Dakar. The 12 former officials present at the launch meeting were subsequently received by Mr. François Murangira, Director of the ILO in Dakar. The latter, after welcoming the initiative, expressed his commitment to support the former international civil servants, and to continue contributing to the ILO’s outreach. A room in the ILO offices in Dakar has already been placed at the disposal of the former officials and arrangements are being made to facilitate the proper functioning of the committee. The Association began its activities by holding a monthly meeting and is maintaining a presence twice a week at the premises provided by the Dakar office.

Djibril Ndiaye, Head of the ILO Documentation and Information Centre, EPI Building, Boulevard du Sud x Rue des Ecrivains, Point E, BP414, Dakar, Senegal Tel. (Standard) 00221338699200; (Direct) 00221338699229; (Mobile) 00221778196220; Fax 00221338699232/33 E-mail: ndiayed@ilo.org; Djibril.ndiaye@gmail.com

Caisse des pensions : nouvelles 2015

Ajustement des prestations au 1^er avril 2015

Comme, pendant la période écoulée entre décembre 2013 et décembre 2014, la hausse de l’indice des prix à la consommation (IPC) des Etats Unis a été inférieure au seuil requis de 2% pour les prestations servies en dollars des Etats-Unis, aucun ajustement à ce titre n’a donc été apporté aux prestations versées en dollars des Etats-Unis.

Pour les retraités et autres bénéficiaires qui ont opté pour le système de la double filière, l’ajustement des pensions en monnaie locale est en fonction de l’évolution de l’IPC dans leur pays de résidence, pour autant qu’un seuil de 2% soit atteint. L’évolution de l’IPC dans la plupart des pays d’Europe n’a pas atteint 2%, il n’y a donc pas eu d’ajustement à ce titre des prestations pour les bénéficiaires qui ont leur lieu de résidence dans ces pays. Toutefois, il est possible qu’une augmentation de votre prestation ait effectivement eu lieu — par exemple pour les retraités résidents dans la zone Euro — ceci étant dû à la dépréciation de la monnaie locale par rapport au dollar. Cette augmentation a été effective si l’équivalent en monnaie locale (euro) du montant de base en dollars ajusté de votre prestation est supérieur au montant initial en monnaie locale, ajusté au 1^er avril 2015.

Il est possible de connaître l’évolution de l’IPC dans les différents pays, en allant sur le site Web de la Caisse (www.unjspf.org), à la rubrique : Taux de change/IPC.

Investissements de la Caisse

Au 31 décembre 2014, la valeur de marché du portefeuille de la Caisse se montait à 52,8 milliards de dollars, contre 51,4 milliards un an auparavant, soit une progression de 3,1%, laquelle, après correction pour hausse de l’IPC aux Etats-Unis, représente un taux de rendement réel (c’est-à-dire, supérieur à l’inflation) de 2,3%. Rendement qui peut paraître faible, cependant, la gestion des avoirs de notre Caisse a toujours été basée sur un équilibre entre les risques encourus et les rendements escomptés à moyen et long terme.

Vous trouverez ci-dessous un tableau qui illustre la valeur des avoirs de la Caisse du 31 décembre 1985 au 31 décembre 2014.

Valeur de réalisation des avoirs de la Caisse du 31 décembre 1985 au 31 décembre 2014

(En milliards de dollars des États-Unis)

Comité mixte.

Le Comité mixte tiendra sa prochaine session du 20 au 24 juillet 2015, au Palais des Nations, à Genève. Les questions de fond inscrites à son ordre du jour seront le budget de la Caisse pour l’exercice biennal 2016-2017, la gestion des placements, ainsi que les hypothèses d’évaluation applicables à la prochaine étude actuarielle de la Caisse, qui sera arrêtée au 31 décembre 2015.

Crise interne au sein de notre Caisse des pensions

Dans le Message no. 55 de mai 2014, nous relations la nomination du Genevois Yvan Pictet, au poste de président du Comité des investissements de la Caisse. Ce dernier, ex-associé de la banque genevoise Pictet avait alors déclaré à la presse : « que cette nouvelle position allait lui permettre de mettre ses connaissances au service de la communauté internationale et de revenir au fondamental de son métier, l’investissement ».

Or, surprise, nous apprenons en ce début d’avril que M. Pictet démissionne de son poste et quitte le Comité des investissements. Contacté par le journal Le Temps, il invoque une surcharge de travail. « J’ai aujourd’hui 70 ans et je n’ai plus envie de travailler 15 heures par jour. Cela faisait dix ans que je siégeais au Comité d’investissement du Fonds de pension, dont la dernière année en tant que président. Je suis déjà président de la Fondation de Genève et administrateur de plusieurs sociétés. Il a fallu faire un choix ».

Cependant, ce départ inattendu a-t-il été favorisé par le contexte de crise actuel qu’il semble y avoir au sein de la Caisse des pensions? Nous avons pu lire dans la presse et dans différents courriels, la prise éventuelle de risques dans les placements de notre Fonds de pension, ainsi que des allégations de malversations en matière de gestion de la part de l’Administrateur de la Caisse.

Le Bureau des services de contrôle interne des Nations Unies (BSCI) qui enquête sur les déclarations de malversations mentionnées ci-dessus, a récemment déclaré « qu’aucune des allégations apparues dans la presse jusqu’à présent ne constitue une fraude financière ». Concernant la gestion des placements, on nous assure que la stratégie ne changera pas, la prudence sera toujours de rigueur.

Nous continuerons d’informer nos lecteurs du développement de cette affaire.

29 avril 2015                                       Guy Favre

Exhibition of the Arts Circle (2 to 13 October 2017)

Organized by the ILO Arts Circle, this exhibition was held in the ILO (Salle des colonnades, Route des Morillons 4) from 2 to 13 October 2017

Double taxation

As all of us are supposed to know, the gross earnings of international civil servants are subject to an internal tax derived from the average of the national income tax rates in headquarters duty stations (Geneva, London, Montreal, New York, Paris, Rome, Vienna).

The UN General Assembly (3rd session, 159th plenary meeting, 18 November 1948, Resolution 239 (III) A, art.7) specifies that the “revenue derived from the [staff] assessment shall be applied as an appropriation-in-aid of the budget”.

In September 2004, the joint SUC/Former Officials’ Section working group on the fiscal system noted that, in some cases, there is double taxation: first, an internal tax on the pension contributions included in gross salary; then taxation of the pensions themselves, which constitute a deferred salary for international civil servants.

How should this problem be tackled?

The ICSC’s solution is, where necessary, to transform the net pension into a gross pension to compensate for any double taxation.

This approach is undoubtedly justified and beneficial for retirees; indeed, it would be a perfect arrangement if it took account of the internal taxation levied on officials – but this is not the case.

In an affirmation of 22 January 2008, the ILO states that the amount of contributions to the UNJSPF (two-thirds by the Organization and one-third by the official) is calculated on the basis of gross earnings (salary, emoluments, SHIF contributions). This gross remuneration is subject to an internal tax schedule corresponding to the average in headquarters duty stations, as indicated above.

This statement – highlighting the risk of double taxation for some retired officials – provides the rationale for the non-taxation of one-third of the pension paid.

It may be recalled that in an article published in 2008, the Union working group on the fiscal system stated that the only correct, justified and perfectly fair solution is the application of the above-mentioned statement by the ILO.

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Alas, it is clear that not all countries have the same attitude towards the ILO’s statement or the concept of double taxation.

• In Spain, three High Courts of Justice –
Seville (Andalusia), on 17 January 2003,
Madrid, on 23 December 2005, and
Barcelona (Catalonia), on 25 March 2007 –
found that “if earnings are not subject to tax, the same is true of pensions, which are nothing other than a deferred income”.

• Canada and the United States both tax only two-thirds of the pension and therefore respect the ILO’s affirmation.

• Some member States (including France, Japan, Switzerland) do not take the ILO’s affirmation into account, and tax the full pension.

• Other member States do not tax the pension at all.

Take the case of France. In a letter of 17 December 2009, the Conciliateur Fiscal (tax ombudsman) of Haute Savoie states: “The argument you advance, that pensions in payment should be exempt from income tax in France based on the proportion (one-third) of corresponding contributions you previously paid to the UNJSPF during the period of active service, which could not be deducted from the internal tax base as assessed by the ILO, has no bearing on this situation. The principle of taxation in France of pensions received has been confirmed by the highest courts. The fact that part of the contributions which are at the origin of these pensions may have been subject to the ILO’s internal taxation has no bearing on this situation. It rests solely on your relationship with that organization.” We can but take note and assess the situation as follows:
– internal taxes,
– are applied as an appropriation-in-aid of the budget,
and therefore:
– resolving the problem of double taxation is solely the responsibility of the organization concerned.

Still in France, the Ombudsman of the Ministry of Economy and Finance, in a letter dated 3 February 2012, states: “For example, some organizations, notably the so-called Co-ordinated Organisations such as the OECD and the Council of Europe, reimburse their staff a part of the tax paid on pension contributions. They describe this as pension tax adjustment. This choice also results from an internal decision on the part of these organizations.”

The ILO’s affirmation recognizes the reality of the facts, which is normal given the purpose for which the Organization was created, but apparently the relevant departments of this same Organization have forgotten the existence of the “appropriation-in-aid” account… Nor should we forget that the Administrative Tribunal of the ILO recalled in one of its judgements: “Besides, staff assessment is not a system of taxation of staff earnings but a means of avoiding or eliminating the inequalities and discrepancies which would result from taxation by member States.”

It is therefore up to the ILO to honour – and ensure that other organizations honour – the use of this account. All that is required here, in fact, is respect for the decision taken by the UN General Assembly at its 3rd session, 159th plenary meeting (Resolution 239(III)), as applied by various international organizations. It is incomprehensible that no organization applying this correction for active officials has done so for retirees.

Suffice it to say that a rectification is called for (as already declared by the new ILO Director General upon his arrival in 2012):

• It would be normal for the ILO to respect the rights of its pensioners, and remedy the losses incurred by retired staff residing in countries that do not abide by its affirmation of 2008 [1].

• To do so, the ILO should use the account for appropriation-in-aid of the budget.

It is evident that the cost of compensating for the losses suffered by pensioners would be significant. Despite this being the result of errors committed by the organizations themselves, it must be conceded that the total reimbursement of these losses would be impossible for the organizations to achieve. But this in no way justifies their inaction or the persistence of these errors.

For their part, retired staff wish to take account of the reality: the ILO’s 2008 affirmation finally recognizes the facts about their income from the year 2007 on. Despite their losses over many years prior to this, we can assume that retirees would be willing to accept correction as from that date, namely January 2008 for their income from 2007.

To do this, and considering
– on one hand, that the real value of the pension paid remains the same, since the only adjustments made are to reflect inflation;
– on the other hand, that the amount to be assessed must be as indicated in the quarterly statements sent to every pensioner by the payments unit of the UNJSPF (the amount set out in the annual certificate delivered at the end of the year is very often different).

Retirees would just have to send the Organization photocopies of their quarterly statements for 2014 (valid for the years 2007 to 2014) for the ILO retroactively to apply the appropriate correction. From 2015 revenues onwards (declaration for 2016), pensioners would submit their photocopied quarterly statements every year and the organization would apply an annual correction accordingly [2].

According to document CCPI-ICS/72/R4 (Doc 3), the internal tax rate is 23.942% of gross (including, of course, contributions to the pension fund). It is therefore this rate that should be taken into account for one-third of the pension paid. The ILO – in accordance with its statement of 2008 – should make reimbursement and attach a “tax adjustment certificate” covering one-third of the pension paid (Doc 7) to obviate any additional tax demand from the country of residence.

To properly address this problem, account should be taken of any change in the salary scale in the event that internal tax is higher than indicated by the ICSC-ICS.

Finally, given the information provided by the Ombudsman of the French Ministry of Economy and Finance (Doc.7), another solution, respecting the current decision taken by the Pension Fund, would be for the latter to pay the net amount of pension for which tax is payable in the country of residence, and separately pay retirees the corrective amount while attaching a “tax adjustment certificate” (Doc.7) to obviate any additional tax demand from the country of residence.

The latter solution would be in conformity with the rights of the Pension Fund, of retired staff and of the organizations concerned.

Obviously, as long as such a solution is not adopted, the ILO’s 2008 declaration should be respected as mentioned above.

Clément Roche, member of the Bureau of the Section of Former Officials, taxation questions

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[1] There is no doubt that in France, for example, upon receipt of the ILO’s statement, many retirees made their 2008 tax declaration (of income received in 2007) either on the basis of two-thirds of the total or for the full amount with the option of a tax credit for one-third; they then will have received a reply from the tax authorities rejecting their declarations and penalizing them with a tax supplement; the latter should therefore also be considered to form part of the tax losses incurred.

[2] Since the tax statement in the country of residence may vary according to whether or not there is additional income, the quarterly statements submitted by UNJSPF retirees are indeed the only correct calculation basis for this exercise.