Health & Pension Schemes Health care and Pension benefits are two major elements in any package for conditions of work and employment. Other components of social security typically include protection against accidents and diseases linked to occupation and work; family benefits, that may include maternity protection; and, unemployment insurance. Health and Pension are treated separately because of their specificities concerning financing (contributions) and management (independent boards).

Topics In and out of the common system SHIF UNJSPF Current demands, SHIF Current worries, UNJSPF Why not be a representative ? The United Nations Common system of salaries and allowances could not be absent from social security aspects. However, health care remains an area where individual Agencies still have some freedom of movement – until when ? Demands, expectations, worries are not the same depending on the type of benefits and the level at which decisions are made – but, for health care as well as for pensions, there is a dire need of motivated, and competent staff representatives.

In and Out the Common System SHIF A typical Agency product – joint ILO/ITU With social security features Autonomous, universal and self-sufficient UNJSPF A typical Common System product With multiple interferences (UNGA, ICSC) With some interesting social security features (management, universality, benefits defined) The ILO/ITU Staff Health Insurance Fund (SHIF) is the only example in the UN system where responsibility for handling health care matters is not delegated to private insurance carriers. The scheme could thus keep very distinctive features: non profit, covering staff and dependents, including retired persons, very strong influence of beneficiaries in decision-making process (in management commmittee through elected representatives, and directly through referendum initiatives). As for the United Nations Joint Staff Pension Fund, this is a body placed under the UN General Assembly, with very strong influence of United Nations and affected by a number of decisions taken by the ICSC – the body through which almost all attempts to reduce staff entitlements are vehicled. The pension scheme managed however to keep some interesting social security features over decades, like influence of contributors on management, pension formula recognizing the need to replace a given portion of the last years’ purchasing power of salaries, limited but interesting solidarity features (minimum pensions, survivors’ benefits). Cost considerations makes control over the pension scheme a priority of member States and the ICSC – since it represents some 23% of payroll. Health care, with rising costs, attracts however more and more attention, and there is always a risk that autonomy be put into question – e.g. for economies of scale. The finances of the pension scheme are sound, and investments including yield match more than statutory liabilities. For health, finances are sound for the active participants. There are some difficulties for voluntarily insured dependents, especially secondary dependents – mostly old parents – that require specific attention from the management committee – and from the Union, to avoid that solutions be retained that contradict the solidarity features of the fund and ILO advocated social security principles. COMMON SYSTEM TRIES EVERY NOW AND THEN TO MESS UP HEALTH CARE ISSUES However, and for the time being, both schemes are sound, healthy and useful.

Staff Health Insurance Fund   BIPARTITE MANAGEMENT Active and retired members Family Coverage 80% reimbursement for all treatments Thresholds for supplementary benefits COMPULSORY AND VOLUNTARY COVERAGE http://www.ilo.org/public/english/bureau/pers/shif/index.htm SHIF is managed by a Committee where administrations and insured persons (active and retired) are represented at parity. ILO representatives are 2/3, ITU 1/3. Coverage includes primary dependents – spouse and children – together with staff member as 1 unit for contributions and benefits (solidarity component). Reimbursements are at 80% for all types of treatment, including those not adequately covered in most national schemes (frames, dental care, drugs notably). There is all the less need for supplementary insurance, that reimbursement takes place at 95% as soon as an yearly threshold of expenditure (before reimbursement) has been reached (10,000 $ at HQ and for P field staff; 3,000 $ for local field staff). Insurance is compulsory as soon as there is a contract of more than 4 months – including for field staff (in countries where access to health care is not free). Voluntary coverage is for pensioners and those dependents for whom family benefits are not paid (notably parents). The web site of SHIF is very clear, and trilingual.

HTTP://WWW.UNJSPF.ORG/ U.N. Membership in UNJSPF The UNJSPF includes all UN system Agencies, with a predominant role for the United Nations which comprise for pension matters a number of Agencies otherwise independent, such as UNDP, UNHCR, UNICEF … This « UN Group » weighs roughly 60% of the system, and 40 % of the Board, which is a very strong influence. Additional confusion stems from the fact that the UNJSPB secretary also acts as Secretary to the UN Pensions Committee. Some very small Agencies, not otherwise fully part of the UN Family, are members of the Fund. Given their size, they are not yet represented on the tripartie Board – 33 members – which includes representatives of the retirees through one Association (FAFICS). HTTP://WWW.UNJSPF.ORG/

United Nations Joint Staff Pension Fund A funded, benefits defined social security scheme Old age, invalidity, survivors, child benefits FINANCED BY CONTRIBUTIONS expressed in % of BASE SALARY COMPULSORY COVERAGE, BUT RESTRICTIONS, RETROACTIVE REGULARIZATION not always possible ADMINISTERED BY TRIPARTITE BODY WITH STRONG U.N. REPRESENTATION Limited but real influence of pension committees of member organizations The financing and benefits structure of the Fund is almost unique: usually, benefits defined schemes (those where pensions are expressed in pecentage of last salary) are pay-as-you-go, i.e. benefits of the year are paid by contributions of that year (no reserve funds accumulated except for treasury), while funded schemes (accumulating reserve funds to cover future liablities) pay contributions-defined benefits (the more you paid throughout your life, the more you get, subject to interest rates fluctuations) – no relation with last salary. The UN pensions are benefits defined, but financed out of funding technique (reserves are needed since the UN may disappear one day). Contributions do not include post adjustment beyond New York, and some fringe benefits for G staff, they take into account the fact they pensions are taxable after payment, while salaries are taxed before being paid. Poor finance management in the 80s justified reductions in benefits at that period – but reductions could be kept to minimum for G staff (world wide mobilization) and improvements in taking into account cost of living for initial pension (computed on New York basis) when significantly higher then core of the system. DUAL INFLUENCE OF U.N. GENERAL ASSEMBLY & ICSC THROUGH WAGE SYSTEM SIGNIFICANT DECREASES IN BENEFITS SINCE EARLY 80s … … BUT A FEW IMPROVEMENTS WERE ACHIEVED

Current demands, SHIF Improve advance payments for costly treatments Base threshold for supplementary benefits on actual wages Reinvent long term care … Facilitate maintaining coverage, screening better voluntary coverage SHIF is basically a very good health insurance scheme, biut some features still leave things to be desired: for costly treatments, the system does not provide for advanced payments, which leads to financial difficulties pending reimbursement, and to bureaucratic acrobacies to palliate this – reimbursment made before payment – leading to cases of fraud (get reimbursed first, then not pay the bill …). Access to supplementary benefits (95%) requires sometimes out of pocket expenses representing several months of salary – for low grade G staff in low cost duty stations where « modern care » is very expensive. Long term care for the elderly, if not properly medical, is not covered. Voluntary coverage excludes some categories – non married couples – and is too easy to access for categories provoking very high costs – subscription of coverage to immediately access benefits is not compatible with solidarity. There are often no agreements with providers to achieve better tariffs for SHIF members, and SHIF might consider having its own day-care structures in some duty stations to reduce costs (like Turin had). Negotiate rates with local providers, consider direct provision of care ENSURE COVERAGE FOR NON MARRIED COUPLES

Current Worries, UNJSPF Protect value of benefits in case high inflation, devaluation Ensure protection for non-married couples Pay benefits for children born after retirement KEEP THE SCHEME A REAL JOINT VENTURE OF ALL UN SYSTEM The UN pension scheme is findamentally a very good pension scheme, covering in terms of levels of benefits what in many countries requires both a genreal (basic) scheme and a supplementary pension scheme. There are still some elements that require improvements, though. Huge monetary fluctuations sometimes provide disfunctioning in a scheme which is dollar based, and also linked to national currencies through local salaries. Some exceptional national situations were addressed over the past decades, but a global approach has not yet been identified that would preserve link with last salary to ensure income replacement, and take into account high contributions in dollars when currency later on devaluated. The ILO SU is in close contact with the other participants and represetnatives of « knowledgeable » administrations to work out proposals technically sound and not dangerous for acquired rights. Some categories are not covered – non-married partners for survivors benefits, children born after retirement, external collaborators, precarious contracts … Deferred benefits are protected in their purchasing power only after age 55, which makes changes in career difficult for some (inflation of 2%, which is low, not taken into account during 10 years – say from 45 to 55 years of age – provokes a reduction by almost 1/4th in the real value of pension). Years contributed for national pensions are not accounted for by the UN and vice versa – even for qualifying conditions, etc. Two main concerns: excessive powers of the UN on the functioning of the Fund, through General Assembly and centralization of representation of a number of Agencies; the difficulties in controlling that assets are actually used as they should be, for the benefit of pension fund members only. Improve adjustment for deferred benefits Establish coordination mechanisms with national pension schemes PROTECT INVESTMENTS FROM GREED AND INCOMPETENCE

UNJSPF : ILO specificities Excellent collaboration among the three components Leadership role on several key topics (former colleagues ex-USSR, non-married couples, divorced spouses, pensionable remuneration, disability, role of UNJSP Board, investment policy …) THE ILO THRIFT BENEFIT FUND: UNPRECENTED, AND STILL UNIQUE The ILO Staff Pension Committee is a tripartite body like the other Staff pensions Committees in the other Agencies. The fact that ILO is specialized Agency competent for social security brings in more credibility and more responsibility. ILO Staff Pensions Committee was always considered as a key player by all those involved – and the voice of its representatives is constantly listened to in each group of constituents (Governments; administrations; participants). The administration of pensions in the ILO (like in any other Agency) is handled by a secretariat, except for a number of activities that are centralized (UN Geneva or UN New York). This centralization justified reducing staffing beyond reasonable – hence some delays in conducting basic operations (pension estimates) and in properly supporting the Pensions Committee in its efforts to monitor and improve the system. The ILO Thrift Benefit fund was created in the early nienties following a very powerful ILO HQ strike movement over pension issues. The Staff Union Committee deliberately maintains very close relations with elected staff representatives – since action of the latter is void of effect without explicit support by the former, and by staff. Unfortunately, participants’ representatives do not have such links with their Unions and Associations in all of the other Agencies. Preoccupations concerning means of action of ILO Pension Committee Secretariat TRADITIONAL STRONG RELATIONS BETWEEN SUC AND PARTICIPANTS’ REPRESENTATIVES (Not so frequent !)

Why not become a representative ? Staff need to have strong representatives on SHIF management committee as well as on the ILO Staff pensions Committe. Shop stewards, and Union members or representatives should not leave duties and powers of representation to others – this is not good for staff !