1. Call for more Equitable Pensionable Income for Professional Staff retiring outside the USD zone Negative impact of weak US Dollar in Euro Zone & Hard Currency Countries Sixth Meeting of Italy-based UN Organizations 1-2 October 2010 fintan.scanlan@fao.org

2. Depreciation of USD against hard currencies over ten-year period (Sep 2000 to Aug 2010) Sep 2000 Aug 2010 % Drop EUR per USD 1.1210.763 - 31.9 AUS per USD 1.7501.107 - 36.7 CAD per USD 1.4801.032 - 30.3 NZD per USD 2.3401.374 - 41.3 GBP per USD 0.6900.639 - 7.4 CHF per USD 1.7401.041 - 40.2 SEK per USD 9.4607.208 - 23.8 JPY per USD 107.00087.100 - 18.6

3. Trend in 36 month average over 10 years based on Aug. figures Eurozone36 mth avgInverseNotional PR100,000 (USD) August 20100.7171.3947€ 71,700 August 20090.7251.3793€72,500 August 20080.7501.3333€75,000 August 20070.7891.2674€78,900 August 20060.8151.2270€81,500 August 20050.8551.1696€ 85,500 August 20040.9591.0427 €95,900 August 20031.0600.9434€106,000 August 20021.0800.9259€108,000 August 20011.0180.9823€101,800 Fixed Exc Rate0.83331.2000 €83,330

4. 36 month average in Euro versus fixed exc. rate (0.833)

5. Key data on Pension Fund Data as of 30/06/10  Market Value $35.317billion  Assets Equities61.4% Equities61.4% Bonds31.2% Bonds31.2% Real Estate04.0% Real Estate04.0% Short Term03.4% Short Term03.4%  Investments across 39 countries 39 countries 7 international/regional institutions 7 international/regional institutions 26 currencies 26 currencies Data as of 31/12/09  Participants 114,000  Beneficiaries 60,000  Member Organizations 23  Funding Status in 2009 Contributions receivedUSD1.95 billion Contributions receivedUSD1.95 billion Payments to beneficiariesUSD 1.92 billion Payments to beneficiariesUSD 1.92 billion

6. Rationale  There is a growing disparity between Pensionable Remuneration and Pensionable Income in the Eurozone and other hard currency countries due to unfavourable UN exchange rates at retirement based on the 36 month average  In Dec 2009 the projected Purchasing Power Parity of 1USD in the USA was equivalent to 1.24 dollars in Italy and 1.49 dollars in Switzerland – Source: The Economist).

7. Conclusions of UNJSP Board Meeting in July 2010  Preferred solution to address wide fluctuations in local track benefits of professional staff is to change to 120 month average.  Due to actuarial cost, currently estimated at 0.63% of PR, would move the fund into a deficit at this time (albeit slight).  Board requested that the Secretary/CEO continue to monitor fluctuations and report to the Board on an annual basis.

8. Proposals to Pension Board  Immediate term Provide a temporary floor exchange rate of US$1.20 as an interim measure (3-4 year period) to ameliorate pensionable income of Professional Staff retiring at this time Provide a temporary floor exchange rate of US$1.20 as an interim measure (3-4 year period) to ameliorate pensionable income of Professional Staff retiring at this time Restore the CAP to a maximum of 120% of the local track over the current CAP of 110% Restore the CAP to a maximum of 120% of the local track over the current CAP of 110%  Medium term To broaden the 36 month average exchange rate on retirement to 120 months in line with current thinking of the Pension Board Executive To broaden the 36 month average exchange rate on retirement to 120 months in line with current thinking of the Pension Board Executive

9. Effect of broadening the 36 month average on Pensionable Income for the Euro as of August 2010 Mth Avg Exc Rate Notional PR USD100,000 Difference Difference (%) 360.71771,700-- 600.74674,6002,9004 1200.85385,30013,60019

10. Euro equivalent of USD 100,000 PR

11. Effect of USD on Pensionable Income against other hard Currencies as of Aug 2010 36 mth avg USD 100,000 120 mth avg USD 100,000 Diff in annual pension EUR0.71771,7000.85385,300 EUR 13,600 AUD1.210121,0001.443144,300 AUD 23,300 CAD1.108108,0001.266126,600 CAD 18,600 NZD1.470147,0001.695169,500 NZD 22,500 GBP0.59559,5000.59759,700 GBP 200 CHF1,090109,0001.303130,300 CHF 21,300 SEK7.14714,0007.976797,600 SEK 83,600 JPY989.8m11111.1m JPY 1.3m

12. Time for Action Benefits of On-line Petition as an Option  Would enable contributors to the UN Pension Fund to register their concerns directly to the Board  Would be instantly accessible to all staff across agencies  Protocols could be put in place to protect passwords and ensure authenticity of results  Signatures would be automatically tracked providing constant feedback while petition remains on-line