FC 102/25

Finance Committee

Table of Contents

I. International Civil Service Commission (ICSC)

A. UNITED NATIONS COMMON SYSTEM

B. CONDITIONS OF SERVICE OF STAFF IN THE PROFESSIONAL AND higher categories

Evolution of the margin
Base/floor salary scale
Pensionable remuneration
Impact of decisions of General Assembly on post adjustment up to February 2003

C. REMUNERATION OF THE GENERAL SERVICE AND OTHER LOCALLY RECRUITED CATEGORIES

Salary surveys
Rome interim adjustment

D. CONDITIONS OF SERVICE APPLICABLE TO BOTH CATEGORIES OF STAFF

Review of the pay and benefit System
Mobility
Common scale of staff assessment
Review of the level of education grant

E. STRENGTHENING OF THE INTERNATIONAL CIVIL SERVICE

II. United Nations Joint Staff Pension Board (UNJSPB)

1. The purpose of this paper is to report on the decisions of the United Nations General Assembly (UNGA) at its 57^th session (2002), which considered the annual reports of the International Civil Service Commission (ICSC) and of the United Nations Joint Staff Pension Board (UNJSPB) for 2002, and to inform the Committee on recent developments of the conditions of service of staff in the Professional and higher categories and General Service staff.

I. International Civil Service Commission (ICSC)

A. UNITED NATIONS COMMON SYSTEM

2. The General Assembly reaffirmed its commitment to a single, unified United Nations common system as the cornerstone for the regulation and coordination of the conditions of service of the United Nations common system, being convinced that the common system constitutes the best instrument to secure staff of the highest standard of efficiency, competence and integrity for the international civil service, as stipulated under the Charter of the United Nations. The UNGA also reaffirmed the statute of the Commission and its central role in the regulation and coordination of the United Nations common system.

B. CONDITIONS OF SERVICE OF STAFF IN THE PROFESSIONAL AND HIGHER CATEGORIES

Evolution of the margin

3. In accordance with its standing mandate from the UNGA, the ICSC continued to review the relationship (referred to as the margin) between the net remuneration of the United Nations staff in the professional and higher categories in New York and that of the comparator civil service (the United States federal civil service) employees in comparable positions in Washington, D.C. The UNGA having noted that the net remuneration margin for 2002 was 109.3, reaffirmed that the range of 110 to 120 for the margin should continue to apply, on the understanding that the margin would be maintained at the desirable midpoint of 115 over a period of time and requested the Commission to keep the matter under review and report to the General Assembly on the outcome of this review at its sixty-second session, taking into full account the Noblemaire principle.

Base/floor salary scale

4. The UNGA approved with effect from 1 January 2003 a revised salary scale of gross and net salaries for staff in the professional and higher categories. The scale reflects a differentiated real increase of the base/floor salary scale to address the low level of the margin at the upper grades of the salary scale. This increase brings the grades P-4 to D-2 up to the margin level of 111 and the overall margin to 112.2. The grades P-1 to P-3 remain unchanged as they were already at 115 or above.

5. With effect from the same date, the amounts of the mobility and hardship allowance and the scale of separation payments were revised accordingly. The financial implication of these changes for FAO is estimated to be US$ 3 250 000 for the year 2003.

Pensionable remuneration

6. In accordance with article 54 (b) of the regulation of the United Nations Joint Pension Fund the scale of pensionable remuneration for the Professional and higher categories is to be revised whenever the net remuneration in New York is adjusted. Resulting from the decision of the General Assembly regarding the base/floor salary scale for staff in the Professional and higher categories the Chairman of the ICSC has promulgated a consequent revised scale of pensionable remuneration with effect from 1 January 2003. The financial implication of these changes for FAO is estimated to be US$ 689 000 for the year 2003.

Impact of decisions of General Assembly on post adjustment up to February 2003

7. The levels for the Rome post adjustment classification, showing the fluctuation of the post adjustment multiplier relative to changes in the rate of exchange were announced by the ICSC from February 2002 to February 2003 as follows:

TABLE 1

C. REMUNERATION OF THE GENERAL SERVICE AND OTHER LOCALLY RECRUITED CATEGORIES

Salary surveys

8. The UNGA noted the Commission’s report on the surveys of best prevailing conditions of employment conducted in London, Vienna and Geneva.

Rome interim adjustment

9. In line with the procedure for interim adjustments established by the ICSC and approved by the Council², an across-the-board 2.88 per cent net increase in salaries of the General Service staff came into effect 1 November 2002.

10. The annual pensionable remuneration was revised by the same percentage increase applied to the net salaries (1 to 1 interim adjustment procedure) and with effect from the same date.

11. The annual net amount of the children’s allowance was revised from € 999.34 to € 1 028.24. As this amount is lower than that in effect from 1 November 1997 (e.g. € 1 077.33 net per annum), staff members on board prior to 1 November 1998 and already in receipt of this allowance will maintain the higher amount until such time as future provisions produce a children’s allowance equal to or higher than that in effect on 1 November 1997.

12. The annual amounts of the first and second language allowances were revised by the same 2.88 percent increase as that applied to the net salaries and with effect from the same date, 1 November 2002.

13. The financial implication of these changes for FAO is estimated to be US$ 1 083 000 for the year 2003.

D. CONDITIONS OF SERVICE APPLICABLE TO BOTH CATEGORIES OF STAFF

Review of the pay and benefit System

14. The UNGA took note of the concrete progress made by the ICSC in the review of the pay and benefits system and of the decisions taken by the ICSC as indicated in its 2002 report to the fifty-seventh session of the General Assembly (Supplement No. 30 A/57/30).

15. In reviewing the pay and benefit system the ICSC had noted the substantial number of interrelated items which required further study before substantive proposals could be formulated. It decided that a strategy for addressing the range of items to be considered and the sequence in which they should be addressed would assist the orderly progression of the organizational change efforts. The ICSC, therefore, decided to establish the following set of priorities and the time frame for the reform of the pay and benefits system:

Mobility

16. The ICSC considered the issue of mobility of staff both within and among organizations of the common system and identified it as a core element within the framework for human resources management and requested its secretariat to develop a programme of work which should address, inter alia, links between career development and mobility, and provide analysis of the advantages and disadvantages and obstacles to mobility both for the organizations and staff members. Any future work should be developed in accordance with the ongoing work on the review of pay and benefits.

17. The UNGA took note of the work of the ICSC and requested it to continue to develop its study in this area and to report to the General Assembly at its fifty-eighth session.

Common scale of staff assessment

18. The ICSC reported to the General Assembly that the current common scale of staff assessment should continue to apply and should again be reviewed in conjunction with the next comprehensive review of the pensionable remuneration to be undertaken in 2004.

Review of the level of education grant

19. The UNGA noted and approved the ICSC recommendation to increase the maximum reimbursement levels for seven countries or currencies areas (Austria, Italy, Switzerland, Spain, United Kingdom, United States dollar in the United States and United States dollars outside the United States), as well as other recommendations in respect of the reimbursement of expenses under the education grant. The financial implication of these changes for FAO is estimated to be US$ 27 285.

E. STRENGTHENING OF THE INTERNATIONAL CIVIL SERVICE

20. The UNGA took note of the report of the Secretary-General concerning the strengthening of the international civil service. It endorsed the terms of reference of the panel on the strengthening of the international civil service, as contained in the report of the Secretary-General and requested the panel also to comment on the role and main characteristics of the international civil service. It invited the Commission to comment on the findings and recommendations of the panel and to submit its comments to the General Assembly at its fifty-ninth session, to be considered by the Assembly together with the report of the Secretary-General.

II. United Nations Joint Staff Pension Board (UNJSPB)

21. The General Assembly considered the report of the United Nations Joint Staff Pension Board and took note of the actuarial situation of the United Nations Joint Staff Pension Fund, which went from an actuarial surplus of 0.36 per cent of pensionable remuneration as at 31 December 1997 to an actuarial surplus of 4.25 per cent of pensionable remuneration as at 31 December 1999, and to an actuarial surplus of 2.92 per cent of pensionable remuneration as at 31 December 2001.

22. It also took note of the general support of the Board for the report of the Working Group established by the Board to undertake a fundamental review of the benefit provisions of the Fund, taking into account developments in staffing and remuneration policies in the member organizations and in pension arrangements at the national and international levels. It noted in particular that the Board approved the recommendations of the Working Group as further promoting the human resources framework adopted by the International Civil Service Commission and the General Assembly and serving to enhance the mobility of staff and the portability of pensions.

23. It approved, in principle, the changes in the benefit provisions of the Regulations of the Fund that would eliminate the limitation on the right to restoration for existing and future participants, with implementation to begin at such time as the actuarial valuation of the Fund showed a clear upward pattern of surpluses.

24. The UNGA also considered the reviews carried out by the Working Group and subsequently by the Board of various aspects of the pension adjustment system. It approved, in principle, the following changes in the pension adjustment system with implementation to begin when the actuarial valuation of the United Nations Joint Staff Pension Fund showed a clear upward pattern of surpluses, namely:

1. to apply cost-of-living adjustments to deferred retirement benefits as from age 50;
2. to apply cost-of-living differential factors to deferred retirement benefits as from the date of separation.

25. It also noted that the Board approved the recommendation of the Working Group to eliminate the 1.5 percentage point reduction in the first consumer price index adjustment due to existing and future beneficiaries, subject to an actuarial surplus being revealed in the actuarial valuation to be performed as at 31 December 2003.

____________________________

¹ Index of cost-of-living for international officials in Rome. Please note that the index has been re-based effective 1 October 2000, date of the last cost-of-living survey

² CL 82/REP, para. 186.187; CL 86/REP, para. 160 (b)