FC 97/9

Finance Committee

1. At its Ninety-sixth session in May 2001, the Committee had a brief preliminary discussion on a paper which had been prepared at its request to provide information on after service benefits and any further measures that could be taken regarding the accounting and funding arrangements for these liabilities. The secretariat outlined the progress made to date; the Director-General's preference to continue for the time being with the present accounting and funding arrangements for After-service Medical Coverage (ASMC); and the Director-General's proposal that the same funding mechanism for ASMC could be extended to cover the Termination Payments liability in the event that the liability for ASMC became fully funded one day. The Committee noted that an enabling Conference resolution would be needed to extend the ASMC funding mechanism to Termination Payments. Accordingly, the Committee decided to return to the subject at its next session.

2. In order to facilitate the Committee's review of the Director-General's above-mentioned proposal, a copy of the paper which was submitted to the Ninety-sixth Session is attached (FC 96/12). The Committee is requested to decide on the following:

1. continuation of the present accounting and funding arrangements for After-service Medical Coverage (ASMC);
2. extension of the same funding mechanism for ASMC to cover the Termination payments liability;
3. in the event that the Finance Committee accepts the proposal described in (2) above, it may wish to endorse the following enabling resolution for onforwarding to Council and Conference.

RESOLUTION

After-Service Medical Coverage - Termination Payments

THE CONFERENCE

Having considered the report of the Hundred and Twenty-first Session of the Council,

Having noted the unfunded liability for past services,

Having noted the progress made to date in funding the liability for After-Service Medical Coverage (ASMC) since the application of the Conference resolution 10/99,

Approves to extend the application of Conference Resolution 10/99 to cover the Termination Payments liability in the event that the liability for ASMC becomes fully funded, so that

1. any income generated from the investments held in respect of the Separation Payments Scheme, Staff Compensation Plan and ASMC shall be applied as originally foreseen to ensure the adequacy of those funds to extinguish the respective liabilities;
2. should there be an excess in the investment income of the Separation Payments Scheme, Staff Compensation Plan and ASMC over the requirements for these funds then this should in principle be earmarked for the unfunded Termination Payments liability; and
3. following the past practice to establish separate funds for after service benefits, the investments in the Separation Payments Scheme, Staff compensation Plan and ASMC exceeding the liabilities shall be earmarked for Termination Payments Fund.