Message from the Acting CEO
I am happy to contribute to this newsletter which provides some important information on the activities of the Fund.
I am pleased to announce that the percentage of cases dealt with in less than 15 days is reaching 81% at the end of April, well above the target of 75% as fixed in the Fund's budget’s performance indicators. This is of paramount importance for our participants and beneficiaries, and demonstrates that the Fund is more than ever at the service of its customers.
The Fund is also responsive when there is a disaster, as you will read in the tragic accident of Ethiopian Airlines. The Fund reaches out to its stakeholders to make sure all are informed of their rights and entitlements in the wake of such tragedies.
I realize still that we have more to do to improve our communication. We plan to post more information on the website in the coming weeks to keep you updated in real time of the life of our Fund. Please consult regularly our website. Soon we will also open a LinkedIn account to diversify our channels of communications.
The Pension Board will meet in July with some important items on its agenda, including the Fund’s budget, actuarial matters, investments and benefit provisions. We will keep you updated on these new developments and others relevant to your rights, pensions and benefits.
The UN Pension Fund is one of the few defined-benefits in the world and we are all fortunate to share a part in it. Its financial health is well maintained, and the quality of its services is improving. Let’s make sure the efforts of its governing bodies and staff are well recognized.
Message from the Representative of the Secretary-General (RSG) for investment of UNJSPF assets
In keeping with my commitment to proactive communication with all stakeholders, I had provided – for the first time ever -- an initial overview of our investment results for 2018 within one month of the close of the year, at end-January 2019. The initial overview was posted on both the OIM website (https://oim.unjspf.org) and the Fund Secretariat’s. This overview was based on the first available numbers, which were very preliminary and subject to significant change. The final numbers did not become available until late April, as our third-party independent Master Record Keeper meticulously collected all relevant information and calculated various performance metrics in accordance with industry standards. The final numbers for year end 2018 are now posted on our website.
In some ways, this is similar to what happens with the preparation of our audited financial statements, which are finalized only by May-June of the following year after the Board of Auditors have reviewed them and provided an opinion on them, and formally presented to the Pension Board in July.
These are highly specialized and resource-intensive exercises, which have to follow a meticulous process meeting industry standards. Any lapses in this exercise can be severely damaging to our credibility, so it is better to take the time needed to calculate these numbers as accurately as possible. For example: we receive information on the actuarial value of our liabilities – a metric at least as important as asset value information in determining the financial health of a pension fund -- only once every two years. The reason is the resource-intensity of this exercise, and the high cost of creating doubt about the validity of these numbers – as we have ourselves experienced in recent years.
With this background, let me turn to our investment results for the year-to-date in 2019.
Volatility in global financial markets continued and we had a very strong start of 2019, after a challenging fourth quarter of 2018. The Fund’s assets have already bounced back to US$66.5 billion as of 29 April 2019. Based on preliminary numbers, as of 31 March 2019 the Fund has exceeded our Long-Term Objective of 3.5% real (net of inflation) return in US dollar terms for the last 2, 3, 5, 10, 15, 20, 25 and 50-year periods.
As I have previously stated at various stakeholder forums, our goal is to fully discharge all our obligations to current and future beneficiaries. Pension payments are made over decades, and short-term fluctuations in investment returns do not have a material impact on these pension payments so long as the Long-Term Objective is being met.
Financial markets are likely to be volatile over the near-term as they try to gauge and adjust to the future direction of fiscal and monetary policy after a decade of quantitative easing, as well as rising geopolitical risks around the world. At the same time, our fully funded status gives us a certain amount of financial cushion to withstand a period of low investment returns. I am confident that the Office of Investment Management will be able to deal with whatever challenges the markets may present, with the support and encouragement of all our stakeholders.
Ethiopian Airline Causalities: A prompt reaction from the Fund
The staff of the Pension Fund learned about the tragic Ethiopian Airlines accident that occurred on 10 March with great sadness. News from many sources reached us and confirmed that a number of our colleagues were on that plane. Our first thoughts went to the families and the first question to ourselves was how to help.
The next day, the Geneva Office of the Fund was tasked to be the center for receiving, gathering and validating all information from different sources. Communication spread throughout the Pension Fund to better coordinate the efforts. Within days, 25 names were reported with 19 initially being identified as affiliated with the United Nations. The process of gathering more detailed information took place. We used every means we had at hand, be it a regular official contact, a phone call to a colleague or former colleague or an email to an HR officer in the field. Both offices of the Pension Fund, in New York and Geneva, mobilized all resources available.
Our focus was to identify whether the victims were our clients and how to contact the families to provide our support and services. Some employer organizations came forward and by the second week, the list of beneficiaries and participants affected came down to 13 with other victims either not being a participant or retiree. One person had in fact been misreported as being on the plane.
The efforts to contact the employing organizations as well as the families continue while fully respecting their privacy. We used the pool of diverse staff employed in the Fund to overcome language barriers. We communicated in Chinese, Italian, German in addition to English and French to reach out to the families. Gradually, we were able to contact the organizations and families of our clients, victims of the tragedy.