Don’t Risk Our Multi-Billion Dollar Retirement Fund on Wall Street, Warning UN Staff – Global Issues

  • by Thalif Deen (United Nation)
  • Joint press service

Thousands of United Nations retirees and their beneficiaries, ultimately over 71,000 people, who depend on their pensions to survive in the economy, are relentlessly defending the Fund – while opposing any venture capital efforts.

The Coordinating Committee of the United Nations System of Unions and International Employees Unions (CCISUA), which represents more than 60,000 employees worldwide, is opposing a proposed new plan to “outsource a the majority of retirement fund investments go to Wall Street.”

In a letter to Pedro Guazo, UNJSPF Secretary-General’s Representative for Asset Investment Prisca Chaoui, President of CCISUA last week warned that the proposal to outsource “ultimately calls into question the very nature of the fund.” our retirement.”

“Is it a system that continues to be managed prudently by professionals employed by the fund, who as UN staff have a stake in the long-term health of the fund, a the system uses economies of scale of funds to reduce costs and has that in particular outperformed the private sector by far? ” she asked.

“Or is it a company outsourced to Wall Street to fall victim to a get-rich-quick reward culture with little regard for the welfare of its beneficiaries around the world?”

“Based on the information that has been shared with us, we do not understand the rationale behind the move to external management, due to unnecessary and costly duplication of internal capacity,” said Chaoui.

“We also believe that your intentions to “stop the bleeding” have been addressed by regulatory changes you have made to address issues raised by the United Nations Office of Internal Monitoring Services (OIOS). states and adopts a new Strategic Asset Allocation that significantly reduces our exposure to risky assets.”

Given that pension funds have access to the same financial instruments as Wall Street and employ equally experienced investment staff, she argues, there’s no reason for underperformance. than.

“Indeed, the pension fund’s other portfolios have performed well under in-house management.”

“Today we stand at a fork in the road that will determine the future of our fund. We ask that you reverse your outsourcing strategy and keep our property management in-house safe,” she stated.

Meanwhile, a petition is currently circulating among UN retirees and staff, saying Secretary-General Antonio Guterres declared it a temporary measure that would increase operational efficiency.

“However, the plans allow for increased outsourcing over a three-year period. And over the long term, our in-house conservative, UN-managed pension fund outperformed many of the final externally-managed pension funds that have since been forced to close. Indeed, our fund is in computational equilibrium,” said the petition seeking signatures.

“Under the proposal, up to 75% of the fund’s fixed-income portfolio will be managed externally.”

The Secretary-General is proceeding with the outsourcing despite strong concerns expressed at the February meeting of the pensions board, despite the protest letter from CCISUA ( content/uploads/2022/03/ PF-react-letter.pdf) and although the United Nations Auditing Council notes that the fund is not capable of effectively evaluating its external managers.

In 2007, a year before the global financial crisis and the collapse of many financial institutions, former Secretary General Kofi Annan considered outsourcing to Wall Street. But he wisely changed course in the wake of employee protests and kept our funds safe, according to the petition.

“By giving our retirement funds to Wall Street during these times of financial turmoil, it risks falling victim to a culture of short-term bonuses, greed for good, little care. to the welfare of employees and retirees worldwide and very little. values ​​the ethical values ​​of the UN”, the petition is titled “Secretary-General Antonio Guterres: Don’t Give Our Retirement Funds to Wall Street. ”

“By signing this petition, you are calling on the Secretary-General to once again stop outsourcing our pension fund and keep its management intact. Please share this with your colleagues across the UN and professional bodies”.

In response to the ongoing protests, Pedro Guazo, Representative of the UNJSPF Secretary-General for Investment in Assets, said on March 16 that the Foundation was aware of additional concerns about temporary outsourcing part of the fixed income portfolio.

“As stated at the last meeting of the Pension Board on 24-25 February 2022 (see this) and in mine message As of 12 March 2022, United Nations Pension Fund investments are generally doing very well, given the current economic and geopolitical climate. ”

Still, Guazo argued, the Fund could do better in a fixed-income portfolio. For years, that portfolio has underperformed by its standards, as outlined on the Fund’s website. this.

He pointed out that the Fixed Income Team of the Fund’s Office of Investment Management has made a proposal to manage part of the portfolio internally (35%) and temporarily employ an external advisor under the supervision of an investor. monitoring and control of the same internal team (65%. ).

This 65% fixed-income portfolio represents about 18% of the total portfolio managed by the Office of Investment Management.

“This proposal was reviewed by the Fund’s Internal Committee, Retirement Board and Investment Committee, which agreed it was a good interim solution to enhance the performance of the fixed income portfolio. He notes that the use of temporary outside advisors is a pension industry best practice to tackle underperforming asset classes.

The immediate benefit to the United Nations Pension Fund, he said, would be an additional profit of $60 million a year, and the solution is only temporary. When the team is ready in a number of months The Investment Management Office will again manage the portfolio internally.

“I hope this clarifies the purpose and benefits of this activity which, again, will be for a limited time only,” he added.

Report of the United Nations Office IPS

Follow IPS News UN Office on Instagram

© Inter Press Service (2022) – All rights reservedOrigin: Inter Press Service

Source link


News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button