|Department of Public Information • News and Media Division • New York|
Sixty-sixth General Assembly
10th Meeting (AM)
Weighing Financial Situation of United Nations, Budget Committee
Delegates Press Member States to Pay All Dues, on Time, in Full
Also Urge Secretariat to Manage Funds Properly, Efficiently;
Officials Introduce Reports on Status of United Nations Pension Fund
Member States gathered at the Fifth Committee (Administrative and Budgetary) meeting today prodded each other once again to pay their financial obligations in full and on time as they discussed improving the Organization’s financial situation and prepared to kick off talks on the 2012-2013 budget cycle.
A week before the Secretary-General was set to formally unveil his proposed programme budget for the biennium 2012-2013, several Member States were troubled that arrears could be jeopardizing the Organization’s financial stability and compromising its ability to deliver on its mandates.
Côte d’Ivoire’s delegate, for example, lamented that the outstanding assessments for peacekeeping operations as of 5 October 2011 stood at $3.3 billion, up $113 million from a year earlier. “Payments of contributions in general, particularly for peacekeeping operations, must be paid in full and on time to maintain global peace and security, strengthen human rights, and contribute to development,” he said.
The discussion took place a week after the United Nation’s top management official, Angela Kane, Under-Secretary-General for Management, gave the Committee a detailed snapshot of the Organization’s current financial picture. Today, Maria Eugenia Casar Perez, newly-appointed Assistant Secretary-General and Controller in the Department of Management, handed the Committee a brief update on the Member States that had fully paid their dues and payable assessments since the 11 October cut-off date.
Speaking on behalf of the Group of 77 developing countries and China, Argentina’s delegate mirrored the sentiments of several Member States as he noted that a small group of developed countries — and one country in particular — were behind the outstanding payments for the regular and peacekeeping budgets, as well as for the United Nations war crimes tribunals. Surprisingly, in the case of the peacekeeping budget, that included several States that were permanent members of the Security Council and therefore held a special responsibility to maintain international peace and security.
The delegate of the United States said that his Government took its international obligations “very seriously” and the Obama Administration had worked to pay its United Nations assessments on time and in full. The amount owed by the United States was “distorted” because the fiscal year timelines of the Organization and the United States Government were different. He added that in this discussion, it was often overlooked that the United States was the largest contributor to the United Nations and had paid more than $7.5 billion in 2010.
Taking a slightly different look at the matter, Singapore’s delegate pointed out that the United Nations had to play its part by being an accountable, efficient and effective manager of its financial resources. “Just as Member States must answer to their taxpayers, the United Nations must be answerable and be fully accountable to its Member States,” she said. Singapore asked the Secretariat to “show resolve in making accountability take root within its ethical and moral DNA”.
In other business, the Committee discussed the United Nations Joint Staff Pension Fund. Secretariat officials laid out the details included in several reports, which contained the Fund’s revised budget for the nearly finished 2010-2011 budget cycle and estimates for the upcoming 2012-2013 biennium.
Pension Board Chair Nana Yaa Nikoi said the Fund had expanded by 50 per cent over the last decade to include 23 member organizations and more than 185,000 active participants, retirees and other beneficiaries. The Fund’s market value stood at $38.1 billion as of 30 September 2011. According to the report, the Pension Board was asking the Assembly to approve a 2012-2013 budget estimate of $194.17 million for the Fund, which included $98.4 million in administrative costs and $92.94 million in investment costs.
Other delegates speaking today included Chile (on behalf of the Rio Group), Canada (on behalf of Australia and New Zealand), Nicaragua, Iran, Senegal, Japan, Cuba, Republic of Korea, and the Russian Federation.
Lionel Berridge, Acting Director, Programme Planning and Budget Division, and Collen Kelapile, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), also spoke today as they introduced reports.
The Committee will reconvene at 3 p.m. Friday, 21 October, to discuss construction issues regarding facilities in Africa, Geneva and Headquarters.
The Fifth Committee (Administrative and Budgetary) met today to discuss improving the financial situation of the United Nations and to consider the administrative expenses of the United Nations Joint Staff Pension Board.
Under its agenda item on the United Nations financial situation, the Committee had before it the Secretary-General’s report on improving the financial situation of the United Nations (document A/66/521), which updates the information in the previous Secretary-General report (document A/65/519/Add.1) and reviews the situation as of 5 October 2011 and gives updated projections through 31 December 2011. The report considers four main financial indicators: assessments issued; unpaid assessed contributions; available cash resources; and the Organization’s outstanding debt to Member States. (See Press Release GA/AB/4002)
According to the report, financial indicators for 2011 showed improvements in some areas, despite the current global financial climate. Cash projections were projected to be positive at year’s end for all funds, although the final outcome would depend on last-quarter contributions. The level of debt to Member States was projected to decrease to $448 million at the end of 2011, compared with $539 million a year earlier. In 2011, unpaid assessments had increased for all categories, but more Member States had met their obligations in full.
Under its agenda item on the United Nations Joint Staff Pension Board, it had before it that body’s report on the administrative expenses of the United Nations Joint Staff Pension Fund and transitional measures concerning the Fund’s financial reporting under the International Public Sector Accounting Standards(documents A/66/266 and Corr.1), which contains the Fund’s revised budget for the biennium 2010-2011 and its budget estimate for the period from 1 January 2012 to 31 December 2013. The 197-page report includes seven chapters and four annexes. Chapter V lists recommendations for ad hoc measures to implement the International Public Sector Accounting Standards by 1 January 2012. Chapter VII gives a detailed summary of follow-up action to implement the requests and recommendations of the Board of Auditors and the Advisory Committee on Administrative and Budgetary Questions (ACABQ).
The Board recommends that the Assembly approve the following:
· A $21.77 million reduction in appropriations for the biennium 2010-2011, resulting in revised appropriations for the 2010-2011 in the amount of $154.54 million (including $80.48 million in administrative costs, $71.29 million in investment costs, $2.53 million in audit costs and $245,300 in Board expenses). Of that amount, $133.04 million would be apportioned to the Fund and $21.51 million would be directly charged to the United Nations under the cost-sharing arrangement.
· A revised estimate of $144,300 for extra-budgetary resources for the biennium 2010-2011.
· The $194.16 million Pension Fund estimate for the 2012-2013 biennium (comprising $98.4 million in administrative costs, $92.94 million in investment costs, $2.6 million in audit costs, and $204,400 in Pension Board expenses). Of that amount, $173.26 million would be apportioned to the Fund and $20.9 million to the United Nations under the cost-sharing arrangements.
· $156,800 for extra-budgetary costs funded by several Member States for the biennium 2012-2013.
· An amount not exceeding $200,000 to supplement contributions to the Emergency Fund.
· The ad hoc and transitional financial measures regarding the International Public Sector Accounting Standards implementation by 1 January 2012.
The Committee also was set to consider the third report of the Advisory Committee on Administrative and Budgetary Questions on the proposed programme budget for the biennium 2012-2013 (document A/66/7/Add.2), which weighs in on the Joint Staff Pension Board’s report on administrative expenses and transitional measures for financial reporting, and recommends that the Assembly approve the recommendations contained in paragraph 139 of the Board’s report.
Also before delegations was the Secretary-General’s report on the administrative and financial implications arising from the report of the United Nations Joint Staff Pension Board (document A/C.5/66/2*), which notes that the Joint Staff Pension Board’s report to the General Assembly contains the Board’s overall administrative expenses for the biennium 2012-2013 with financial implications for the United Nations budget. It states that should the General Assembly approve the Board’s proposals and recommendations, the appropriations under section 1, overall policymaking, direction and coordination, the proposed programme budget for the biennium 2012-2013 would reflect a $897,900 reduction after re-costing.
Statement by Controller
Before the Committee began its discussion of the Organization’s current financial situation, MARIA EUGENIA CASAR PEREZ, newly-appointed Assistant Secretary-General, United Nations Controller, provided delegations with updated information since the presentation made on 11 October 2011 by Under-Secretary-General for Management Angela Kane. At that time, Ms. Kane laid out the Organization’s financial situation, now issued in a report of the Secretary-General, improving the financial situation of the United Nations (document A/66/521).
Ms. Casar Perez said that as Controller, she was the custodian of the Organization’s resources. Her main objective was to earn the trust of Member States, and she looked forward to working with them. She drew the Committee’s attention to paragraph 25 of the report, which notes that Hungary, Israel, Norway and the Republic of Moldova had fully paid their dues and payable assessments since the cut-off date of 11 October, joining the 19 other Member States that had done the same. Further, payments from Austria and Monaco meant the addition of two more Member States to the list of countries that had paid in full all their assessed contributions that were currently due and payable.
SEBASTIÁN DI LUCA (Argentina), speaking on behalf of the Group of 77 developing countries and China, said there were some positive changes in the Organization’s financial situation such as the reduced level of debt owed to Member States. The Group was nevertheless concerned that the outstanding assessment for peacekeeping operations had grown to about $3.3 billion, $843 million more than the amount tallied on 31 December 2010. The Group also noted that unpaid assessed contributions for the regular budget totalled $867 million as of 5 October 2011, up $516 million over the year-end 2010 figure.
It was unfortunate that the bulk of the outstanding payments for the regular and peacekeeping budgets and international tribunal were owed by a small group of developed countries, one in particular. Surprisingly, in the case of the Peacekeeping budget, this included several Member States who were Permanent Members of the Security Council and had a special responsibility for the maintenance of international peace and security, he said.
The Group had consistently stated that the full, timely and non-conditional payment of assessed contributions by Member States was a Charter obligation, and it had also held the strong position that all Member States, especially those with the capacity to settle their arrears, should honour their financial commitment in a timely fashion. He said his delegation was encouraged that the amount owed to troop and policy-contribution countries was expected to decline to about $48 million by the end of this year, down from $539 million in 2010. But more should be done to ensure that Member States were fully reimbursed, on time, and as a matter of priority, he added.
MANAHI PAKARATI (Chile), speaking on behalf of the Rio Group, noted with satisfaction the Organization’s overall improved financial situation in 2011, but expressed concern about the $3.3 billion gap in payments to peacekeeping operations, an $843 million increase over the amount owed a year earlier. She noted that while payments to the regular budget had increased in 2011, unpaid assessments also increased by $81 million between October 2010 and October 2011, resulting in a total deficit of $867 million as of 5 October 2011. Arrears owed to the Organization were jeopardizing its financial stability and compromising its efficiency and effectiveness. She reiterated her appeal for all Member States to meet their obligations on time, in due form and without conditions, especially those responsible for most of the debt, which was unfortunately borne mainly by one State year after year.
She called for bolstered efforts to reimburse in full and on time countries that contributed troops, formed police units and contingent-owned equipment. She noted that several Rio Group members were among those contributors and were making considerable sacrifices to remain so for lengthy periods. Pointing to closed peacekeeping missions with a deficit, she reiterated her request to Member States in arrears in their payments to those operations to pay as soon as possible. She noted with concern the $6 million increase in unpaid assessments in 2011 to the international tribunals, even though more Member States had paid in full. She encouraged Member States with outstanding payments to the Capital Master Plan to pay in full so that Plan could be implemented within the specified timeframe. She rejected any unilateral measure that was contrary to international law and made it difficult — and on occasions impossible — for Rio Group members to pay their contributions to the United Nations budget.
LEAH MARCHUK (Canada), speaking also on behalf of Australia and New Zealand, said she was encouraged by the positive signs in the United Nations financial situation, as well as the continued decline in projected debt owed to troop-contributing countries and the projected positive cash position for the Organization at year’s end. But getting there would depend on Member States’ contributions in the last quarter of 2011, and Canada, Australia and New Zealand would monitor that situation closely. The fact that the Organization’s year-end cash position had declined since 2010 suggested the need for ongoing efforts by Member States to ensure the Organization maintained a positive cash balance in the future.
She expressed concern over the ongoing impact of Member States’ arrears on the Organization’s work, as well as over the amount of unpaid assessments across all categories of the United Nations budget. The level of unpaid assessments to the peacekeeping budget, at $3 billion, was unacceptably high. She also noted with concern that decreased liquidity in peacekeeping missions had led to an increase in the imprudent practice of cross-borrowing.
Her delegation would continue to demonstrate their commitment to the United Nations by paying their dues in full and on time, she continued, and urged all Member States to follow suit and without condition. She encouraged eligible Member States to consider submitting multi-year payment plans as a way to address their budget arrears. All Member States had a shared responsibility to ensure that the United Nations financial resources were managed effectively. In that regard, she welcomed the Secretary-General’s efforts to increase financial discipline within the Organization and to enhance oversight and accountability, and she welcomed all initiatives to increase the Organization’s efficiency and make better use of available resources to achieve agreed mandates.
DANILO ROSALES DÍAZ (Nicaragua) aligned his country with the statements made by the Group of 77 and the Rio Group, and said it was more important than ever to strengthen the role of the Organization, especially in light of world challenges that threatened peace and development. It was necessary to strengthen multilateralism to meet those challenges. He rejected the cynicism of others who followed an unjust economic model that killed many people year after year. Member States were not responsible for the increasing economic crisis and there was no reason why they should bear the consequences.
As reflected in the United Nations Charter, all members had the legal responsibility to pay their contributions in time and in full so the Organization had the resources to carry out its mandates. He was concerned that $867 million had not been paid to the Organization’s regular budget, and the main contributor and primary debtor was responsible for 87.4 per cent of this amount. It was more disturbing to see the high level of $3.3 billion owed in contributions to peacekeeping operations. The increase in debt was even more disturbing since so much of that money was owed by members of the Organization that declared wars as members of the Security Council.
Nicaragua was proud that it had paid its contributions to the regular budget in full and its contributions to the Tribunals and the Capital Master Plan. It would continue to comply with its obligations despite the heavy burden on its own national budget, he said.
RASHID BAYAT MOKHTARI (Iran) said that after a local bank shut down the bank accounts of a large group of Member States, his Permanent Mission had to pass through many ordeals to financially sustain its activities, including meeting its dues and commitments to the United Nations budget. Member States had then encountered other difficulties in opening bank accounts at other local banks, an act that contrasted with the legally binding commitments of the Host Country.
He said that Iran had found an alternative solution to the problem in July. But ongoing complications sill prevented it from transferring to the United States any amount related to the contributions to the budgets of the United Nations from a location in Europe. Iran had always maintained a good record in honouring its financial dues to all international organizations. The present situation that had been imposed on it and had barred a United Nations member from functioning regularly and paying its contributions to the Organization, he added.
ABDOU SALAM DIALLO (Senegal) noted the improvement in the Treasury of the United Nations. Senegal had fully met all its financial obligations to the regular budget, the Capital Master Plan and the tribunals. Regarding its peacekeeping assessments, he said Senegal’s Government had made appropriate provisions to settle that matter as soon as possible. He reaffirmed Senegal’s faith in the Charters’ ideals and its commitment to spare no effort to meet its financial obligations to the Organization. He encouraged the Secretary-General to continue to show innovation to strengthen the United Nations efficacy.
The Organization should be managed according to the highest standards of efficiency and transparency, in line with Assembly resolution 64/259. He stressed the need to repay on time the debt owed to troop-contributing countries. Those financial resources enabled those countries to renew equipment, build capacities, lend more support to the Organization, and rebuild and maintain sustainable peace in conflict areas. Lauding the work of the International Criminal Tribunal for Rwanda and the International Criminal Tribunal for the Former Yugoslavia, he called on States to meet their financial obligations to those institutions.
MONDO YAMAMOTO (Japan) said his Government had faithfully fulfilled its obligations to pay its assessments in full and on time. He lauded the projected positive cash position for all funds by year’s end, the significant improvement in the level of debt owed to Member States and the increase in the number of Member States meeting their obligations on time and in full, despite global financial difficulties. He reiterated Japan’s request that the Secretariat use Member States’ contributions efficiently and effectively when implementing the Organization’s legislative mandates. He called on the Secretariat to seek further efficiency, taking into account Member States’ national efforts. In that regard, the Assembly should scrutinize the Secretary-General’s proposals with a view to setting a realistic level of resources necessary to implement given mandates.
YOUSSOUFOU BAMBA (C ôte d’Ivoire) lamented that the total amount outstanding for peacekeeping operations as of 5 October 2011 was $3.3 billion, which was $113 million higher than a year earlier. That showed that while the Organization’s financial situation was improving overall, the situation for peacekeeping operations was languishing. He noted that the Secretariat had used $130 million in cross-borrowing to benefit six peacekeeping operations. In comparing that amount to the $53 million available at year’s end for cross-borrowing in 2012, it was necessary to recognize that specific funding of peacekeeping operations was not guaranteed.
That was of even greater concern when one took into account that peacekeeping budgets were on a different timeline than the regular United Nations budget and that most payments for peacekeeping were issued in April and May. Payments of contributions in general, particularly for peacekeeping operations, must be paid in full and on time to maintain global peace and security, strengthen human rights, and contribute to development.
Last week, Under-Secretary-General Angela Kane had announced the names of 18 countries, Côte d’Ivoire among them, that had paid their United Nations contributions in full as of 5 October 2011, despite difficulties to do so owing to the financial crisis, he said. On Tuesday, Côte d’Ivoire had signed an agreement with the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) to make space available to that mission rent-free. He thanked the international community for its support to Côte d’Ivoire, particularly during its post-electoral crisis. He stated Côte d’Ivoire’s strong commitment to the ideals of the United Nations Charter and to paying its contributions on time. That was part of the country’s effective return to the international scene.
DIANA LEE (Singapore) said she understood that some Member States faced genuine difficulties in paying their assessments, but that those countries did not account for a large proportion of the budget. The real reason for the arrears in certain categories was the late and non-payment of assessments by certain major contributors. The solution was simply that every Member State must pay its assessed contributions in full, on time and without conditions. “We would go a long way towards putting the United Nations on as sound financial footing if the major contributors would only live up to their basic responsibilities,” she said.
But, she continued, that was only half of the equation; the other half was that the United Nations had to play its part by being an accountable, efficient and effective manager of its financial resources. “Just as Member States must answer to their taxpayers, the United Nations must be answerable and be fully accountable to its Member States,” she added. She urged the Secretariat to keep developing a stronger results- and performance-oriented culture and to deliver its mandates. Singapore asked the Secretariat to “own its reform processes” and show resolve in making accountability take root within its ethical and moral DNA.
The United Nations financial situation was not completely dire and it was in better shape than some of its Member States. But precisely because of the sense of need in many regions, such as the Horn of Africa, Member States and the wider United Nations should concentrate their efforts to ensure speedy delivery of resources to the most desperate.
OSCAR LEÓN GONZÁLEZ (Cuba), endorsing the statements made earlier on behalf of the Group of 77 and the Rio Group, said it was significant that the highest debt to the United Nations budgets continued to be owed by one Member State, the same State that benefited from the main distortion in the methodology that set the scale of assessments. It was striking that those who used the financial crisis as a pretext to promote arbitrary reductions in the regular budget “curiously obviate in silence” the fact that the extra-budgetary resources included in the Organization’s regular budget made up 59.1 per cent of all resources allocated to the Secretariat in the 2010-2011 biennium. That portion would increase to 61.9 per cent in the 2012-2013 biennium.
Meanwhile, upcoming budget deliberations would include discussions on proposed reductions in resources earmarked to implement the mandates of the organization’s development pillar. In addition, “while the warmongering of the responsibility to protect daily used hundreds of millions of dollars in the bombing of civilians”, financial burdens would be transferred through special political missions to the Organization’s members, who refuse to accept interventionist doctrines implemented by the most powerful, he said.
Even facing the unjust economic, commercial and financial blockade imposed by the United States Government for the past 50 years, Cuba had kept its obligations to the regular budget and the Capital Maser Plan up-to-date, made all its 2011 contributions to the International Tribunals, and made huge efforts to pay, in due time, its peacekeeping assessments.
Cuba’s inability to use the United States dollar in international transactions, due to the criminal blockade, made its transfers subject to currency fluctuations. That negatively affected its capacity to pay. Cuba also faced difficulties in making its contributions to the United Nations since its transactions had to be made through a third country because of the blockade’s regulations. “The blockade policy against Cuba must cease. […] The extraterritoriality of the blockade violates the rules and principles of international law and the Charter of the United Nations,” he said, adding that the Assembly had voted to end the blockade on 19 occasions.
KIM SEO JUNG (Republic of Korea) noted with appreciation the overall improvement in the Organization’s financial situation, the projected positive cash balance at year’s end and the reduction in the level of debt to Member States, despite the current difficult global financial climate. The Republic of Korea was striving to fulfil its financial obligations despite fiscal constraints caused by ongoing global economic difficulties. Taking into account Member States’ fiscal difficulties, the steady increase in the United Nations regular budget over the last decade was not sustainable.
Now was the time for the Organization to find better ways to carry out its mandate efficiently and effectively, he said. Towards that end, the Republic of Korea would actively participate in the discussion on the 2012-2013 budget proposals. The Republic of Korea was committed to doing its best to fulfil its financial obligations. Last week, it had paid $35 million towards its outstanding assessed contributions. It would continue to try not only to ensure payment of its outstanding contributions for peacekeeping operations as soon as possible, but also to secure more resources to pay its assessed contributions on time.
ALEXANDER A. PANKIN ( Russian Federation) said that the report revealed some encouraging signs, but the situation was uneven in different budgets and remained unstable. The unpaid assessments were much larger than they had been at the end of last year. Those lower cash reserves could lessen the accomplishments of the Organization. He noted the growth in the number of Member States that had honoured their obligations in full and on time.
Member States were facing a difficult financial climate. The Secretariat had to follow rational financial planning. The Russian Federation noted this year that there had been a drop in the debt to Member States providing peacekeeping troops compared with the end of 2010. He hoped for a continuation of this momentum. The Russian Federation maintained its position that Member States had to honour their obligations to the Organization so it could meet its mandates, he added.
STEPHEN L. LIEBERMAN ( United States) said that his Government took its international obligations very seriously. The Obama Administration had made great effort to pay its United Nations assessments on time and in full. It was known that the amount owed by his country was “distorted” because the fiscal year timelines differed between the Organization and the United States Government. But it was less known that the United States was the largest contributor to the United Nations and had indeed paid more than $7.5 billion in 2010.
Continuing, he said that since January 2011, the United States had paid over $2 billion in peacekeeping and international tribunal assessments. The United States expected to pay its 2011 budget in full within the next few months. To suggest that the United States was not committed to meeting its United Nations obligations was “wrong and patently absurd”. The United States was committed to peace and security, providing humanitarian assistance and promoting human rights.
The Committee then began its consideration of the administrative expenses of the United Nations Joint Staff Pension Fund, under its agenda item on the proposed programme budget for the biennium 2012-2013.
Introduction of Reports
NANA YAA NIKOI, Chair of the United Nations Joint Staff Pension Board, introduced that body’s report on the administrative expenses of the United Nations Joint Staff Pension Fund and transitional measures concerning the Fund’s financial reporting under the International Public Sector Accounting Standards (document A/66/266 and Corr.1). She said the format for presenting the budget information had changed slightly from previous years whereby background and supplementary financial information were now included in a separate document.
As noted in section II of the supplemental document, the Fund had continued to grow, expanding 50 per cent in the last 10 years, to include 23 member organizations and more than 185,000 active participants, retirees and other beneficiaries, she said. It had expanded to cover an increased number of individuals in some 190 countries and to address a wider range of unique circumstances. The market value of Fund assets, which declined sharply in 2008, to $31.3 billion at year’s end, had since “recovered well”, to some $41.4 billion as of 31 December 2010. But recent market trends had left the value of the Fund much as it was at the beginning of the year. As of 30 September 2011, it stood at $38.1 billion.
Next, LIONEL BERRIDGE, Acting Director, Programme Planning and Budget Division, introduced the report of the Secretary-General administrative and financial implications arising from the report of the United Nations Joint Staff Pension Board (document A/C.5/66/2). He said that according to the Pension Board’s report, $20.9 million represented the share of the United Nations in the administrative and audit costs related to the Pension Fund. Of this amount, $13.39 million would represent the share of the regular budget while the $7.52 million balance would represent the share of the fund and programmes.
He said that a provision of $14.28 million was already included, under section 1 of the proposed programme budget for the biennium 2012-2013, to cover the share of the regular budget in the expenses of the central Secretariat, excluding expected reimbursements from funds and programmes. If the Assembly approved the Pension Board’s proposals and recommendations, the appropriation under section 1, overall policymaking, direction and coordination, of the proposed programme budget for the biennium 2012-2013 would reflect an $897,900 reduction, he said.
COLLEN KELAPILE, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s third report on the proposed programme budget for the biennium 2012-2013 (document A/66/7/Add.2), which assessed the Pension Fund’s administrative expenses and transitional measures concerning its financial reporting under the International Public Sector Accounting Standards. He said the Advisory Committee had been informed that recent market trends had left the value of the Fund’s assets at approximately $39.1 billion as of 28 September 2011, compared to $41.4 billion a year earlier. The Fund’s equity investments in emerging markets had increased from 13 per cent in 31 March 2010 to 15.5 per cent in 31 August 2011.
He welcomed the progress in diversifying the fund’s portfolio into equities, but reiterated the Advisory Committee’s position that decisions on investments should be based on safety, profitability, liquidity and convertibility. He said the Advisory Committee did not object to the Pension Board’s recommendations on the Fund’s resource proposals for the biennium 2012-2013. He noted the Fund’s significant challenges due to the increased number of beneficiaries and the steady loss of institutional memory owing to the high number of people retiring and separating from the Fund’s secretariat. Still, he was concerned about the high number of vacant posts and the Fund’s difficulty in recruiting candidates with the requisite specialized skills and experience.
While recognizing the need to mitigate risks in investments and better deliver services to a growing population of active participants, retirees and other beneficiaries, he expected that with the completion at the end of 2014 of the Integrated Pension Administration System and its anticipated benefits, resource requirements would be proportionately reduced in future budget submissions. He concurred with the Secretary-General’s request concerning appointing members to the Investment Committee. He did not object to transitional measures proposed by the Pension Board that the Fund be authorized to continue to apply the Financial Regulations and Rules in a way that allowed it be compliant with the International Public Sector Accounting Standards.
SEBASTIÁN DI LUCA (Argentina), speaking on behalf of the “Group of 77” developing countries and China, noted that the number of Pension Fund member organizations had increased 7.1 per cent from 31 December 2008 to 31 December 2010, and that the number of active beneficiaries had increased 63 per cent. He noted with satisfaction that the market value of the Fund’s assets had recovered from $31.3 billion in 31 December 2008 to $41.4 billion in 31 December 2010. He welcomed progress in diversifying the Fund’s portfolio in developing countries and economies in transition, and expressed interest in hearing about the outcome of recent research and attempts to move into markets in the Middle East and Africa. Investments should be based on the four main investment criteria of safety, profitability, liquidity and convertibility.
He welcomed the results-based budgeting format of the budget document for the period 2012-2013 and encouraged the Pension Board to further improve the results-based budgeting in future budget submissions. He noted the Board’s concern over the significant challenges it faced in the volume and complexity of its work due to the increased number of beneficiaries and loss of institutional memory caused by the high number of retirements and other separations. He also noted with concern the Fund’s high vacancy rates and encouraged it to make every effort to address workforce-related challenges, including by filling all vacancies in a timely way.
He asked for details on the initiatives and proposals for the next biennium, including implementation of a new operating model for an Integrated Pension Administration System, the International Public Sector Accounting Standards, responsive client services and improvements of operational efficiency, risk evaluation and management, e-learning, training and knowledge management.
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