The 71st Meeting of the Executive Council Considerations related to the After-Service Health Insurance (ASHI) Liability EC-71/Doc.6(3) and INF.6(3) Presentation to The 71st Meeting of the Executive Council Geneva, 17-19 June 2019

ASHI Considerations - Background Decision 69 of EC-69: Keep in force Resolution 14 (EC-LXI) – increasing payroll costs for the funding of the reserve for ASHI Requests SG to develop a comprehensive proposal, including measures to reduce or contain overall costs of ASHI scheme Consider benefit from harmonization with UN-wide scheme and other UN organizations

ASHI Considerations - Background Decision 60 of EC-70: Develop cost-containment measures related to ASHI Propose recommendations which respond to the report of the UN Working Group on ASHI

ASHI Considerations - Background ASHI Liability at 31 December 2018 was CHF 61.1 million. Increased of 47% over the period 2014-2018 to CHF 61.1 million Primarily result of actuarial valuation Some increase due to number of retirees Increases were offset by the increase in normal retirement age, which will have further effect on containing the liability in future years In addition, WMO is contingently liable for additional CHF 1.2 million

ASHI Considerations - Background To date, WMO has: Followed UN Working Group on ASHI and worked with other UN Organizations on cost matters Considered ACABQ report in connection with long-term funding considerations Continued funding pay-as-you-go costs through a specific payroll charge

ASHI Considerations - Background UN Working Group on ASHI Issued 3 reports to UN General Assembly Latest report on UN Working Group on ASHI (2019) recommended: All avenues of health insurance cost containment should be explored in context of inter-agency discussion Pay-as-you-go approach should continue for currently existing staff Pay-as-you-accrue approach for future

ASHI Considerations - Background However, Advisory Committee on Administrative and Budgetary Questions (ACABQ) reviewed and recommended: UN should continue to explore further options and considerations for efficiency and cost containment UN should continue the pay-as-you-go approach for all staff (current and future) at the present time

ASHI Considerations - Background Funding pay-as-you-go costs through specific payroll charge – currently 3% Payroll charge is included as part of staff standards costs included within the budget and, therefore, funded through assessments and voluntary contributions

ASHI Considerations - Background For last 5 years, pay-as-you-go payments have exceeded the current 3% payroll charge: 2018 increase due to reduction in overall staff costs Therefore, 3% payroll charge no longer sufficient 2018 2017 2016 2015 2014 Pay-as-you go payments in excess of payroll charge 214 000 56 000 83 000 110 000 45 000

ASHI Considerations - Proposal Proposed Resolution: Approve increase of the charge on payroll costs for the funding of the reserve from 3% to 4% beginning 1 January 2020 (annual CHF 400 000) Request Secretary-General to: Liaise with other UN Organizations to identify furhter efficiency and cost-containment measures Determine appropriate charge on staff costs for non-consolidated entities to cover related ASHI exposure

FINAC Guidance Cg-18/INF. 9.6(1), Recommendation 7 That the Executive Council: Adopts draft Resolution 6(3)/1 (EC-71) – Considerations Related to the After-Service Health Insurance Liability;

Thank you Merci