Is The UN Pension Fund in Safe Hands?
The United Nations Joint Staff Pension Fund (UNJSPF) web site reports that as of 30 September 2008, the market value of the Fund's assets was US$ 35.4 billion, writes Merrill Cassell, former Budget Director of the UN Children's Agency UNICEF. This represents a decrease of US$4.4 billion or 11.2 percent, from 30 June 2008 when the Fund's asset value stood at US$ 39.8 billion. In comparison, during the same period, the DOW dropped 4.41 percent and the S&P 500 (a better measure of the market) dropped 9%. In essence UNJSPF's investment portfolio has fared worse than the US markets for the period in question.
On September 30, 2008 the DOW was 10,851, and on December 11, 2008 the DOW closed at 8,565, a further 21% decline. Therefore, UNJSPF's assets may be now standing somewhere between $28 to $30b, representing a decrease of $11 to $12b or 27 to 29% since June 30, 2008. So, what we need from the fund is more UP-TO-DATE information posted on its web site and not this stalemate. With today's market volatility and the power of the Internet, information flows fast and UNJSPF must update its website on the status of the fund's investments more frequently, preferably weekly, for UN staff and UN retirees to see.
Apparently, UNJSPF has sent a circular to UN staff saying that the fund's investments are safe. However, no communication has been sent to worried UN retirees on the status of the fund's investments. Given the administrative efforts that are involved in notifying UN retirees, it would be easier for UNJSPF to send e-mail communication to AFICS who in turn could e-mail its local chapters to notify retirees. A better method of communication is for UN retirees to see the UNJSPF website (www.unjspf.org), but to serve its needs the website must be up-to-date on the current financial crisis.
Additionally, if would be good if UNJSPF could have a webpage where UN retirees can post questions to which they would like answers. While we all trust the management of the fund and the abilities of the investment committee, UNJSPF must be ready to answer questions that concerns its beneficiaries:
For instance:
1. Will retiree pensions be affected by this market downturn?
2. If not, for how long can the UNJSPF pay pensions at full value if the market slump continues for a term of years (like, 2, 3, 5, or even 10 years)?
3. What is the breakdown point at which UNJSPF will not be able to pay full pensions? For instance, what if the market drops as much as 50%? This question should be answered in conjunction with 2 above.
4. What is the cash flow/outflow ratio for contribution collections and beneficiary payouts?
If a question page is provided by UNJSPF then concerned UN staff and retirees can post similar or other questions that may need a legitimate answer. Furthermore, UNJSPF may need to have a six-monthly actuarial valuation of the fund to report whether the fund is capable of meeting its pension liabilities of current and future retirees.
This financial tsunami is not getting better by the day but worse, and it is anybody's guess when the markets will fully recover. Therefore, it is important that UNJSPF have more frequent and up-to-date reporting from on its website.
mailto:merrill_cassell@yahoo.com
http://merrillc.typepad.com
Things Happen Much Faster in the Arctic"
Stephen Leahy
QUEBEC CITY, Canada, Dec 14 (IPS) - In just a few summers from now, the Arctic Ocean will lose its protective cover of ice for the first time in a million years, according to some experts attending the International Arctic Change conference here. A summer ice-free Arctic wasn't due for another 50 to 70 years under the worst-case climate change scenarios examined by the Intergovernmental Panel on Climate Change (IPCC).
"Things are happening much faster in the Arctic. I think it will be summer ice-free by 2015," said David Barber, an Arctic climatologist at the University of Manitoba. Such a "dramatic and serious loss of sea ice will affect everyone on the planet," Barber told IPS. Barber spent much of last winter on a Canadian research icebreaker, the Amundsen, in the Arctic Ocean as leader of a 40-million-dollar ice research project. Scientists expected the Amundsen to be frozen in place for many months during the harsh Arctic winter, when there is no sunlight and temperatures plunge to -50 degrees C. Instead the ship stayed mobile as the normally impenetrable ice was thin and weak.
"The ocean held a lot heat from the summer of 2007 when ice reached its record-breaking minimum," Barber said. That additional heat delayed the formation of winter ice by two months in some places. It also resulted in more storms, windier conditions and much more snow, he said. These are entirely new conditions for the region, noting that the additional snow acts as an insulator, keeping the sea ice warmer which prevents it from becoming thicker.
And if the winter ice cover is thin, then it will melt faster and over a larger area in summer, opening up more water to the heat of the sun in what is called a positive feedback loop. By May of this year there was open water many weeks ahead of normal, exposing the cold water to heat of the sun earlier than ever, Barber said.