Letter VI to UN Retirees on Common Cause

Letter VI to UN Retirees on Common CauseOpen Letter (VI) – Revised – to the UN Retirees (1/3 Lump Sum Recipients).

Time to verify the reality about redesigned & rebuilt UN Internal Justice: Has it become worthy of public trust?

Note: Following our appeal, submitted earlier, we have received several comments and critique to our open letter VI, based on which it has now been possible to revise and place it in a final form.

We very much wish and pray that this will be the last open letter to the Retiree colleagues, just days or weeks before the hearing of the first (ever) Common Cause Appeal # UNAT 2009-001 at the newly born UN Appeals Tribunal.

Unlike other individual/group-specific grievances, caused normally by circumstances at the work place or contractual arrangements and related issues, our Common Cause Appeal # UNAT 2009-001 is unique in several aspects:

  1. First, it embraces many UN retirees around the world who had opted, knowingly or unknowingly of the unintended consequences, for a commutation of one-third of pension at the time of retirement with an anxiety to settle down decently and accepted the lump sum + reduced pension in good faith.
  2. UNJSPF’s continued refusal to restore full pension to those lump sum recipients even though the lump sum itself stands fully recovered, with a good amount of interest, during the life time of the pensioner is unfair.
  3. Since UNJSPF’s practice has been to disclose selectively facts and figures (re: its fiduciary/actuarial reports, recommendations, etc.) and these are out of reach for pensioners independent study and analysis, we have no idea as to whether or to what extent theses facts & figures are used, nudged and fudged to suit executive opinions and decisions.
  4. The Appeal questions some of the unwanted/unethical operational practices without any sanction of the law. The appeal also points out violations in the interpretation and implementation of the UNJSPF regulations and rules (Regulation Articles 1(f), 28(g) and 43) in the context of law of equity, fairness and justice as envisioned in the fundamental constitution of the UN, viz. UN Charter and Universal Declaration of Human Rights .

Historical Background:

  • During the past three decades there have been several individual appeals to the UN Pension Board explaining in both actuarial terms and in mathematical/accounting calculations that the 1/3 lump sum as commuted portion of pension gets fully recovered in a period of 11-13 years, and there was therefore no justification NOT to restore the full pension once the full recovery has been made.
  • May 2009: These examples were also submitted along with other valid arguments last time in May 2009 in a similarly worded individualised appeal from tens and dozens of UN retirees.
  • It is recalled that individual initiatives by UN retirees toward redress of complaints were not given due attention.
  • 20 July 2009: the CEO UNJSPF, following the decision of the Joint Standing Committee of UNJSPB, notified individual appellants that there will be no change in the life-time refusal to restore full pension to the lump sum retirees.
  • Needless to say, none of the appellants was invited to the meeting of the Joint Standing Committee of UNJSPB in mid-July 2009 for any oral hearing. Believing UNJSPB review process is similar to the UNDT procedures in the new avatar UN Internal Justice system, the failure to call in any of the appellants for oral submission etc. did not augur well for the newly established justice system, open, transparent and accountable.
  • Thanks to the grace of the UNJSPF Legal Adviser we were given a choice/freedom to move the apex judicial body in the UN Internal Justice System – viz. UN Appeals Tribunal, born 1 July 2009, for final decision!
  • Recognising similarity of the appeals and respectful of the UNAT time, resources and judicial prudence, it was decided to submit a Common Cause Appeal (Case # UNAT 2009-001). This appeal was submitted as of 27 August 2009, followed by an addendum to give additional argument/information, as of 30 September 2009 – all within the 90 day deadline (starting from 20 July 2009).
  • In accordance with the UNAT operating procedures, the UNAT Registrar obtained by October 2009 the response from the Respondents (UNJSPF) to our common cause appeal. So, the complete case file has been sitting nicely since October 2009 for UNAT review and decision. As UNAT is expected to meet only twice a year, we hope and pray that our common cause appeal will be taken up in the first meeting of the UNAT in 2010.

Contemporary Diversion Story:

As a sort of side-tracking the main issue, a minority of retirees, argued and speculated that the Lump Sum Recipients (with reduced monthly pension) received a big lottery for big investment thus making a windfall of huge profits year after year. The question that remains unanswered is the fairness of the lump sum scheme, rather than what was being done by those who took the lump sum.

The reality, however, is what has been summarised in our common cause appeal after an extensive survey among retirees:

  • Lump sum was welcomed by pensioners to offset sudden loss of regular salary and help in repatriation and resettlement in a new life-style befitting UN retired staff;
  • To defray cost of costly medical treatments long postponed; help children to settle in life;
  • Security against long-standing family commitments (e.g. marriage of children), incl. Any unexpected instability of the UN pension system;
  • Some retirees believed that full pension will be restored once lump sum gets recovered in 11-13 years, similar to national civil service pensions and based on common civilised legal and financial practices.
  • There was no signed agreement between the UNJSPF and retiree agreeing to the life time denial of full pension.

What needs to be understood and accepted is that the rule of law demands equity and fairness to treat all the stakeholders as such. Social security architecture like pension system should demonstrate caring and sharing on equitable basis at all times. Even in the context of fiduciary/actuarial requirements, such equity, fairness and justice will always be possible and should remain the hallmark of social security, especially for UN as a model and custodian of human rights.

Our Argument based on “Rule of Law”:

Commutation of Pension:

Since the definition of commutation in UNJSPF rules is vague and imprecise, we may look into the dictionaries for the correct and appropriate meaning. For example:

Oxford Dictionary says, “Exchange something for something else”. UN is expected to organize a “fair” exchange — not exchange silver for the same weight of gold.

A meaning found in Annandale Dictionary, which is the closest to the lump sum practice, elaborates “to pay a single sum as an equivalent for a number of successive payments”. If the Fund had taken this definition, our contention then would be, “how many is intended for a number of successive payments”, and they could be held to specify the appropriate “number of payments” and not equate it for “forever”. Furthermore, the word “equivalent amount” is also critical in that the single sum payment and the total of the number of successive payments should be equal. Simply citing the Article 28(g) is just a flawed extrapolation of the vague and non-starter Article 1 (f).

Our submission to the attention of the presiding judges is that if they obtain a loan from the bank which mandates monthly repayments to last for life time, would it be right even in the event of the loan being repaid fully, say in ten years time?

Pension System vs. Life Insurance:

It may not be totally irrelevant to compare the pension schemes with life insurance policies, although they are operated totally differently. There are some similarities in the operation of the lump sum and the insured amount. Both are governed by actuarial calculations of life expectancy. In the former case, the money is paid up front and recovery made in instalments (deductions), while in the latter, premium is collected towards the payment of a “lump sum” at death. It is significant that a Canadian Court ruled that continued collection of premium, in excess of the total amount insured for, is “unconscionable”. Wouldn’t therefore the continued deduction of benefit beyond the date of full recovery of the lump sum be similarly unfair?

Are the UNJSPF regulations & rules compatible and in harmony with the foundational “constitution” of the UN?

If it is solemnly imperative for the UN and its agencies to have their regulations, rules and operational procedures should mirror the foundational philosophy and principles of equity, fairness and justice (UN Charter and Universal Declaration of Human Rights), what is this august body of UNAT has to say?

Continue to work with the flawed rules or have courage and dignity to point out the flaws and ask the UN/UNJSPF restore equity, fairness, justice and to restore faith in the UN Internal Justice System?

    Noblemaire Principle:

    The important elements of this principle:

    1. best conditions of service for the UN staff and by implication, retirees after a well-earned retirement based on long service of loyalty and professional standards;
    2. equal pay for equal work; and
    3. no discrimination whatsoever.

    Noblemaire Principle is still in force in UN in the conduct of its management-staff relationships, and this principle should continue to apply even in retirement if the UN wants an unbroken tradition of loyalty and high professional integrity of staff now and in future as often emphasised by the UN Secretary General.

    The General Assembly, in its resolution 59/268, reaffirmed the continuing application of the Noblemaire principle and also reaffirmed the need to continue to ensure the competitiveness of the conditions of service of the United Nations common system.

    As it is common knowledge that at least one national government, namely India (if not some others) has the provision to restore full pension after a period of time determined by the actuaries. In that case, in accordance with the Noblemaire Principle, UNJSPF should follow the best practices available in the national civil service pension system.

    Now here is the question:
    Where and what is the justification for discrimination of UN retirees – those who opted for lump sum or those who do not, even after the full recovery of the lump sum + generous interest thru monthly recovery system (Article 43 of the UNJSPF Regulation), if the lump sum is recognised as a form of indebtedness as it should be?

    UN resolutions on UNJSPF affairs:

    Though the UN pension affairs occupy regular agenda item(s) of the GA, these normally follow a set pattern:

    • Admin and operational budget review and approval
    • Fiduciary/actuarial findings and action plan for operational and financial sustainability; occasional methodology of calculations explained;
    • Changes in the system ground rules if any.

    Despite a good review of all published documentation, it is difficult to find the actuarial committee recommendations and if these recommendations accepted or not accepted and reasons thereof. So it is difficult to know to what extend the UN GA is aware of the correct situation. There may not be concealment of information, but classification and selection for disclosure seem a part of bureaucratic discretion for reasons best known to UNJSPF. It may also indicate a tendency to limit decision key issues at the bureaucratic level, since the legislative architectures appear too cloudy, cumbersome and convoluted with heterogeneous groups/committees/member states absorbed by different geo-political and other priorities.

    Non-Payment of Cost of Living (COL) on the 1/3 of pension for the lump sum recipients:

    Unlike the Civil Service pension system, the UN Pension System do not pay the COL adjustments on the Lump Sum portion; so much so, the lump sum recipients are double-disadvantaged – no restoration of full pension for life, and no COL adjustments on the LUMP SUM!

    Indian Supreme Court Judgement, followed by State High Courts on civil service pension systems (both the central service and state service):

    In the largest democracy (representing 1/6th of humanity), lump sum commutation + reduced pension, and restoration of full pension after 15 years has long been in force both for the national and for provincial civil service systems. This was enforced by the Indian Supreme Court in its judgement of 9 December 1986 on the common cause writ petition # 3958-61 of 1983. This judgement had since been endorsed and spelled out by the High Courts in all the federal states taking into account specific local requirements. The courts also decreed that the cost of living adjustments to be paid on the basis of full pension, not just for reduced pension during the time of recovering commuted lump sum.

    General issues:

    1. Supremacy/permanency/relevance of aspects of “rule of law”, equity, fairness and justice as seen in the UN Charter and Universal Declaration of Human Rights (UDHR) vis-a-vis UNJSPF regulations and rules, procedures and practices.
    2. UNJSPF’s arguments are based on erroneous citing of some of its rules which are not only irrelevant but do not sanction the pension fund procedures.
    3. When “commuting” is applied it needs to be clear as to what is substituted or exchanged for and for what period.
    4. Nowhere in any “rule of law” of any country has it been decreed that commuting one for another takes away the right for equity and fairness of the whole forever!
    5. If the right to equity and fairness can be bartered away or exchanged for any type of allurement, then such a “right” can never remain as fundamental human right. What it implies is that any entity, institution (e.g. UNJSPF) or government can easily truncate such a “right” into something more expedient, convenient and coercive tool for manipulation under the disguise of “good management”.
    6. Hence, the UNJSPF regulations articles/rules 1(f) or 28 (g) cannot be used to infringe upon the fundamental right to equity and fairness. Corollary: longer the 1/3 lump sum recipients live, greater should be the opportunity of their being able to enjoy the fruits of human rights – viz. Equity and fairness.
    7. Read the UNJSPF Form PENS.E/7 as many times as possible in regard to one-third lump sum (items A.2 or B.2 of the form) – it mentions about “renouncing all rights to a minimum pension……”, it does not say anywhere in the form that the one-third lump sum payment means life-time enforcement of reduced pension. The specific reference to other clauses of Article 28 are also irrelevant.
    8. Only reason to write/promulgate the regulations/rules is to be clear and precise and not to mislead and get mis-interpreted. In this connection, it is noteworthy that the rules are so framed except when dealing with the lump sum.
    9. References in the Common Cause Appeal to the Indian Civil Service pension system and Indian Supreme Court judgement of 1985 (incl Government orders to implement the judgement) are quoted only to draw attention to the rule of law on equity and fairness being restored to commuted pensioners after period of time.
    10. No one seeks to copy or imitate Indian pension system, but to learn good lessons of its practices in the context of civil service pensions, recognizing it as “valuable acquired right”, “deferred salary payment” and thus, encouraging long and loyal service essential for better governance. Adherence to the Noblemaire Principle requires adopting the Indian practice or similar.
    11. Finally, our common cause appeal being the first case (UNAT 2009-001) of the new avatar UNAT, which is born with professed professionalism, integrity, transparency and accountability, it is hoped that it will prove its moral mettle and judicial integrity.
    12. We believe that equity, fairness and justice are not only moral goals but an imperative of rationality and good governance. More than heralding the values of “regulations and rules”, we need to make sure that they are truly consistent with fundamental human values and applied routinely in the relations among countries and peoples.
    13. Will a household stay firm if the parents abandon the weaker children and focus on those who are stronger and have been granted a greater share of luck? It obviously will not. This will be a frail household, divided by resentment and by insecurity, where siblings see each other as enemies and not as part of the same family. This is exactly being done in regard to regular pensioners and reduced pensioners even after their indebtedness were fully recovered.
    14. It will not do justice to the UNAT (apex internal judicial body) if it does not prevent/stop the strong UNJSPF from depriving the weaker pensioners (1/3 lump sum recipients), and to prevent the weak from accepting submission and injustice.

    Our hope and prayer is that the UNAT will uphold its tradition of being independent and knowledgeable of human rights and feel accountable to apply what is being the ideal of the UN.

    S.P. Sundaram (R/28009), V.Muthuswami (R/63374) & G.S. Srinivasan (R/66715)

    Joint Appellants of the Common Cause Appeal # UNAT 2009-001

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