Protect UN pensions from sharp fluctuations
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UN pensions are calculated in US dollars. If you retire in the US, your pension is not affected by the value of the dollar relative to other currencies. However, if you retire outside the US, in many countries the ongoing devaluation of the dollar considerably decreases your pension in local currency.
When you retire outside the US, the Pension Fund assigns an exchange rate to your pension based on the last three years (36 months) of service. In those countries where the dollar has been declining steadily over the past three years, the value of pensions in local currency has also steeply declined.
One alternative to attenuate this problem is to establish your exchange rate at the time of retirement on the last ten years (120 months) of service.
The difference between using 36-month and 120-month averages for selected currencies can be seen clearly in the figures below, simulating the conversion of a notional amount of USD 50,000 as of May 2011:
USD 50,000 (36 Mon) USD 50,000 (120 Mon)
EURO 36,550 EURO 41,184
AUD 59,000 AUD 68,863
CAD 54,000 CAD 61,364
NZD 74,000 NZD 80,799
GBP 31,400 GBP 29,648
CHF 53,000 CHF 62,306
EK 361,500 SEK 386,986
JPY 4,600,000 JPY 5,413,038
In percentage terms, the differences (+/-) would be the following:
EURO 12.7%
AUD 16.7%
CAD 13.6%
NZD 9.2%
GBP -5.6%
CHF 17.6%
SEK 7.0%
JPY 17.7%
Using an average exchange rate calculated over 120 months is a long-term alternative that needs to be approved by the United Nations Joint Staff Pension Board and eventually by the UN General Assembly.
To protect our pensions from sharp fluctuations, the 64th FICSA Council decided to promote an on-line petition which enables participants of the United Nations Joint Staff Pension Fund to register their concerns prior to the next meeting of the Pension Board in July 2011.
FICSA would like to strongly urge contributors to sign the petition requesting the immediate implementation of the 120-month approach - already approved by the Board in 2010 - to the calculation of pensions.
We, the undersigned participants in the UNJSPF,
Strongly urge the 58th session of the UNJSPB to recommend the application of a 120-month average exchange rate at the time of retirement for calculation of local track benefit and in this regard a period of retroactivity be considered at the discretion of the Pension Board.
Sponsor
Federation of International Civil Servants' Associations (FICSA)
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