How much is the CERN Pension Fund deficit today? or 80 MCHF/year !!!

2 Ambassadors / March 2010 Reminder... Obligation of CERN to guarantee benefits regardless of funding situation derived from its Status of International Organization CERN has two roles: Employer + State CERN has its own social security system Decision of CERN Council: New governance of the CERN Pension Fund: objective of Full funding For CERN staff CERN pension is the only income once staff retires from Organization There is no better guarantee than a properly capitalized Fund !

3 Ambassadors / March 2010 What happened since Sept.09? Sep.09: PFGB White paper (WP) on full funding has been delivered December 2009 Council meeting Closed session with PFGB experts only Gathering of staff/pensioners: respect of parity No official communication to staff and pensioners!!! Was the PFGB White paper (WP) on full funding examined? Set up (another!) Advisory Committee with 3 CERN/ESO Council delegates 1 CERN Management representative as secretary but no representative of the staff/pensioners!!! (Part of) mandate of this committee: Prepare the DG for future negotiations with the staff Concertation process interrupted !

4 Ambassadors / March 2010 Since 1 st January 2010 Advisory Committee has already met twice Staff Association has met the new President of CERN Council “Desire to proceed quickly: new measures on 1 st January 2011” “Measures involving all parties” On a more positive note, Prof Spiro said: He would no longer invite PFGB experts alone at Council meetings D. Duret (VP of PFGB representing “employees”) invited at March Council meeting What happened since Sept.09?

5 Ambassadors / March 2010 Staff meetings conclusions 1/2 Pension Fund: MCHF deficit is growing by 80 MCHF/year Imbalance means the CERN contribution goes up in smoke ! The Fund will run out of money by 2038 !!! The return on investment WILL NOT save us in the long term 114 MCHF/year are needed to restore the balance in 30 years PFGB recognizes CERN’s responsibility in the face of this deficit by proposing a ratio: CERN/MS: +109 MCHF / STAFF: +5 MCHF This ratio by PFGB is fair when considering that: substantial efforts have already been agreed on by the “employee” college no substantial effort has been agreed on by CERN Main origin of deficit: CERN has not compensated the Pension Fund for the cost of some elements of staff policy it decided on in the past

6 Ambassadors / March 2010 But Council wishes to depart from the conclusions of the PFGB Advisory committee without staff representatives: concertation process not conducted in good faith !!! Delegations will come with their own solutions: many Delegates think with the “pay as you go” scheme in mind (and not capitalized scheme)... along with the current corrective measures in vogue in many countries as in other International Organizations: ESA, EPO staff: a cost to be reduced and no longer a resource to be managed Staff must react now because: Attacks against our interests will come: contribution, benefits, acquired rights It is not up to 4/5 staff to pay the bill ! In 2010: 5YR/CHIS dossier 18 March: Gathering of Pensioners and Staff Petition: “2 000 MCHF deficit, that’s enough!” Conservative measure: ask CERN to financially compensate any loss beyond MCHF should represent 80 MCHF of the 114 MCHF/year needed Staff meetings conclusions 2/2

7 CERN Pension fund: past performance Ambassadors / March 2010

8 The Fund will run out of money ! Ambassadors / March 2010

9 issues for ambassadors 1 st step: gathering of 18th of March Conservative measure : stabilize the deficit now ! Represents + 80MCHF of +114MCHF needed Only employer should pay, not employees  negotiations will come later ! CERN budget for 2011 voted in June 2010 Concertation process interrupted: Advisory Group: MS+DG are preparing their own solution  Unacceptable situation ! PFGB White paper (WP) on full funding must be the basis for negotiations to come

10 Ambassadors / March nd step: negotiations to come Weight of CERN Council’s past decisions PFGB: CERN/MS: +109 MCHF / STAFF: +5 MCHF CERN has misused its dual role as “Employer + State” Employer: it has decided on various elements of a staff policy State: it has not compensated the Pension Fund for the cost of these elements of staff policy The ratio by PFGB is fair when considering that: substantial efforts have already been agreed on by the “employee” college Mechanism of under-indexation of pensions for : if this measure compensates for a contribution deficit, this means that CERN must pay its share (twice the amount)! Reintroduction of reduction factors to pensions between the ages of 60 (by -30%) and 64 (by -7%) no substantial effort has been agreed on by CERN In 2005, Council increased contributions (CERN+STAFF) by only 0,51% instead of 3% Attacks will come: contribution, benefits, acquired rights issues for ambassadors

11 Time for questions Ambassadors / March 2010