November 2007 Pension Fund General Assembly 1 Pension Fund New Governance Structure

November 2007 Pension Fund General Assembly 2 Contents Background Background Main decisions - CERN Council / June 2007 Main decisions - CERN Council / June 2007 New Governing Board New Governing Board Next steps Next steps

November 2007 Pension Fund General Assembly 3 Background : OSNES I (5 Council Delegates; nobody from PFGB) : OSNES I (5 Council Delegates; nobody from PFGB) Review chairman election process and PFGB terms of office Review chairman election process and PFGB terms of office Council decides 6-year limit on PFGB mandates Council decides 6-year limit on PFGB mandates Council decides PFGB Chairman always a Council Delegate Council decides PFGB Chairman always a Council Delegate 2005: OSNES II (5 Council Delegates; 3 PFGB members; 1 ESO) 2005: OSNES II (5 Council Delegates; 3 PFGB members; 1 ESO) Review whole Pension Fund Governance structure Review whole Pension Fund Governance structure Proposal (agreed by everyone in the OSNES II WG) Proposal (agreed by everyone in the OSNES II WG) Diverging views expressed (by Council Delegates, by CERN DG) Diverging views expressed (by Council Delegates, by CERN DG) Council asks 3 independent experts for advice Council asks 3 independent experts for advice Sept 06: experts report submitted to Council Sept 06: experts report submitted to Council Alternative governance structure outlined Alternative governance structure outlined Council endorses Panel’s recommendations Council endorses Panel’s recommendations Council appoints OSNES III to draft proposals Council appoints OSNES III to draft proposals

November 2007 Pension Fund General Assembly : OSNES III ( 4 Council delegates + 1 ESO ) 2006: OSNES III ( 4 Council delegates + 1 ESO ) PFGB members want to participate -> rejected PFGB members want to participate -> rejected Staff Association asks to participate -> rejected too Staff Association asks to participate -> rejected too Proposals submitted to CERN Council in December Proposals submitted to CERN Council in December Strike at CERN to oppose to the OSNES III report Strike at CERN to oppose to the OSNES III report New WG “Levaux” decided by Council New WG “Levaux” decided by Council Background

November 2007 Pension Fund General Assembly 5 “Levaux” Working Group 9 members: 9 members: 1 observer from the Pensioners 1 observer from the Pensioners with the help of CERN Services (Legal, Translation) with the help of CERN Services (Legal, Translation) P. Levaux, chairmanP. Williams F. Bello F. Ferrini S. Lettow E. AllaertD. DuretJ.A. SchneiderPh. Lambert CERN Council Expert s PFGBESO CouncilCERN Management ESO Staff Assoc.CERN Staff Assoc.

November 2007 Pension Fund General Assembly 6 Reaffirmation of the roles of CERN Council Reaffirmation of the roles of CERN Council Regulator Regulator Supreme authority Supreme authority Sponsor Sponsor The Fund remains under the sole legal framework of the Organization (CERN) The Fund remains under the sole legal framework of the Organization (CERN) CERN Council remains the ultimate authority CERN Council remains the ultimate authority The management of the Fund is delegated to an executive structure, separate from the CERN Management The management of the Fund is delegated to an executive structure, separate from the CERN Management Main decisions - CERN Council / June 2007

November 2007 Pension Fund General Assembly 7 Clarification of roles/responsibility/line of reporting of each of the organs of the Fund Clarification of roles/responsibility/line of reporting of each of the organs of the Fund The GBPF reports directly to the CERN Council The GBPF reports directly to the CERN Council The CERN DG has no responsibility as far as governance is concerned, but: The CERN DG has no responsibility as far as governance is concerned, but: If the proposals may have a direct impact on the staff policy, the Council shall instruct the DG to elaborate concerted concrete proposals (SCC, TREF loops, …) If the proposals may have a direct impact on the staff policy, the Council shall instruct the DG to elaborate concerted concrete proposals (SCC, TREF loops, …) If the proposals have a direct impact on the budget of the Organisation, the Council shall consult the DG before any decision If the proposals have a direct impact on the budget of the Organisation, the Council shall consult the DG before any decision ESO to be consulted as described in the agreement between CERN and ESO ESO to be consulted as described in the agreement between CERN and ESO Main decisions - CERN Council / June 2007

November 2007 Pension Fund General Assembly 8 Funding Policy to be established Funding Policy to be established must be clearly defined and incorporated into the Rules and regulations of the Fund must be clearly defined and incorporated into the Rules and regulations of the Fund must define the funding ratio, the Fund’s objective being to reach and maintain this ratio must define the funding ratio, the Fund’s objective being to reach and maintain this ratio must define the mechanisms and duration of the recovery period to reach these objectives in case of underfunding must define the mechanisms and duration of the recovery period to reach these objectives in case of underfunding must reinforce the guarantees in the event of dissolution of the Organisation or withdrawal of one of the Member States must reinforce the guarantees in the event of dissolution of the Organisation or withdrawal of one of the Member States Main decisions - CERN Council / June 2007

November 2007 Pension Fund General Assembly 9 A smaller GBPF A smaller GBPF 10 members instead of members instead of 20 The professional character of the bodies of the Fund is reinforced The professional character of the bodies of the Fund is reinforced 2 experts in the GBPF (with voting rights) 2 experts in the GBPF (with voting rights) 2 experts in the Investment Committee 2 experts in the Investment Committee A code of conduct for the members of the GBPF A code of conduct for the members of the GBPF Main decisions - CERN Council / June 2007

November 2007 Pension Fund General Assembly members and 10 alternates 10 members and 10 alternates 2 members appointed by Council 2 members appointed by Council of which the President of which the President 1 representative ESO DG 1 representative ESO DG 1 ESO Council/DG, 1 ESO Staff Association 1 ESO Council/DG, 1 ESO Staff Association 2 appointed by CERN Management 2 appointed by CERN Management 4 directly-elected members 4 directly-elected members 1 appointed by the Staff Association 1 appointed by the Staff Association 1 appointed by CERN and ESO Pensioners Association (CEPA) 1 appointed by CERN and ESO Pensioners Association (CEPA) 2 experts (with voting rights) 2 experts (with voting rights) 2 Vice-presidents, 1 “employer”, 1 “employee” 2 Vice-presidents, 1 “employer”, 1 “employee” General Manager (ex-officio) General Manager (ex-officio) Governing Board: Composition 1 2 new 1

November 2007 Pension Fund General Assembly 11 Governing Board: Mandate Entrusted by Council with responsibility for overseeing the operation of the Fund Entrusted by Council with responsibility for overseeing the operation of the Fund Secure and maintain the actuarial balance of the Fund in order to meet the Organisations’s pension obligations to the members and beneficiaries Secure and maintain the actuarial balance of the Fund in order to meet the Organisations’s pension obligations to the members and beneficiaries Define the Funding Policy, incl. risk level Define the Funding Policy, incl. risk level

November 2007 Pension Fund General Assembly 12 Investment Committee : Composition Maximum 8 members Maximum 8 members 1 member appointed by CERN Council 1 member appointed by CERN Council 2 “employer” members of GBPF 2 “employer” members of GBPF 2 “employee” members of GBPF 2 “employee” members of GBPF Administrator ex-officio Administrator ex-officio External Professional Experts appointed by GBPF External Professional Experts appointed by GBPF President chosen from among the members of the GBPF President chosen from among the members of the GBPF 2 members of GBPF, with expertise in investment policy and practice 2 members of GBPF, with expertise in investment policy and practice 1 member from Investment Unit (without right to vote) 1 member from Investment Unit (without right to vote) GBPF may widen the composition if necessary GBPF may widen the composition if necessary minimum 6 members without right to vote 2

November 2007 Pension Fund General Assembly 13 Investment Committee: Mandate Advises GBPF on investment matters Advises GBPF on investment matters Draws up an annual investment plan Draws up an annual investment plan Defines tactical investment Defines tactical investment Supervises performance of Fund managers Supervises performance of Fund managers Reports to GBPF Reports to GBPF new

November 2007 Pension Fund General Assembly 14 The New Governing Board F. Ferrini, chairman G. Deroma D. Duret Ph. Lambert S. Lettow F. Wittgenstein J.A. Schneider D.-O. Riska F. Derie K. Van Riel

November 2007 Pension Fund General Assembly 15 Next steps Appointment of the Vice-president (for approval by CERN Council in December) Appointment of the Vice-president (for approval by CERN Council in December) Definition of the Funding Policy and decision on SAA Definition of the Funding Policy and decision on SAA Code of Conduct Code of Conduct Appointment of the General Manager Appointment of the General Manager Appointment to the Investment Committee Appointment to the Investment Committee Actuarial review: proposals to CERN Council Actuarial review: proposals to CERN Council Indexation of pensions for Indexation of pensions for Increase of Contributions ? Increase of Contributions ? And make the new governance structure a success And make the new governance structure a success