UN: EU Statement on United Nations Pension System

UN: EU Statement on United Nations Pension System

UN 61st Session; V Committee, Agenda Item 126: United Nations Pension System
New York, 10 November 2006

Statement by Ms. Katja Pehrman, First Secretary, Permanent Mission of Finland to the United Nations, on behalf of the European Union

Mr. Chairman,

I have the honour to speak on behalf of the European Union.

The Acceding Countries Bulgaria and Romania, the Candidate Countries Turkey, Croatia* and the former Yugoslav Republic of Macedonia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Montenegro, Serbia, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as Ukraine and the Republic of Moldova align themselves with this declaration.

At the outset, I would like to thank Mr. Vladimir Yossifov for presenting the report of the UN Joint Staff Pension Board, Controller Warren Sach for introducing the SG’s report on the investments of the Pension Fund, and Chairman of the ACABQ Mr. Rajat Saha for presenting the ACABQ’s related report. I also wish to thank Mr. Cocheme, Secretary and Chief Executive Officer of the Pension Fund for his presence.

Mr. Chairman,

Needless to say that the EU attaches great importance to this particular agenda item. It is not merely the market value of the Fund’s assets of over 34 billion dollars, as of now, that deserves our particular attention and scrutiny; it is the fact that these assets safeguard the secure retirement of all UN staff and that of twenty other organizations. These people need to be assured that their savings are well managed and properly invested.

The EU notes with particular satisfaction the Fund’s investment performance as reflected in the reports before us today. We are pleased to see that the market value of assets increased by 24,6% in comparison to the previous biennium, the actuarial valuation of the Fund showed a positive result for the fifth consecutive time, and the investment policy of the Fund has outperformed both the new and the old benchmarks. Also, we note the 8% increase of the Fund’s investments in developing countries. In this regard, we urge the Fund to remain prudent with its investments policy, and to manage the current surplus in a wise way, considering the unpredictable nature of currency and stock markets around the world.

Mr. Chairman,

The EU has some concerns on several issues raised by the Board of Auditors and the ACABQ, most notably the lax performance monitoring by the Investment Management Service, the deficiencies in the trade order management system and the yet unfilled positions on risk management and compliance in the Investment Management Service.

We are, on the other hand, very pleased to see that the Pension Board decided to implement the BoA’s recommendation for the establishment of an Audit Committee, which was a long-standing EU position. The EU concurs with the ACABQ’s point of view that it is critical for the Audit Committee to be composed of members with the highest standards of expertise in accounting, financial management, including risk management, and audit. We also agree with the ACABQ’s observations and recommendations pertaining to the management of the investments of the Fund.

Finally, Mr. Chairman, let me point out that, although we in general look at the recommendations and decisions of the Pension Board in a positive way, we will nevertheless seek clarifications on some particular aspects during the informal consultations.

Thank you, Mr. Chairman.

*) Croatia and the former Yugoslav Republic of Macedonia continue to be part of the Stabilisation and Association Process.