Letter to UN Retirees on Common Cause
Dear UN Retirees,
2010 – The year of Hope? In closing 2009, we wish to send our Season’s greeting and offer best wishes for a New Year 2010 that would bring in new hopes for the UN Internal Justice System.
In the last three Open Letters we have described the background and profound arguments of our Common Cause Appeal (Case # UNAT 2009-001) submitted to the newly established UN Appeals Tribunal. The open letter III gave the full text of our individualized appeal submitted to the UNJSPB Standing Committee (May 2009), and because of its negative response, our common cause joint appeal (+ addendum) of 27 August and 30 September 2009 respectively submitted to the UNAT.
UNAT has since received a response from the UNJSPF (Respondents) and this has been shared with the three appellant signatories to the appeal to UNAT. In spite of the fact that ours is a common cause appeal in the public domain, our sense of propriety restraints us from placing the respondent’s response here, but look forward to the occasion when UNJSPF’s reply to UNAT can be responded adequately at the oral hearing of our case. Another reason is that UNAT rules of procedures appear to preclude opportunity to the appellants from rebutting any of the incomplete or false statements by the Respondents. This is opposed to the normal judicial practice for the prosecutor (in this case, the appellants) to have the right to closing remarks. Hope and pray this opportunity will be available at the oral hearing of the case.
Notwithstanding all these, catching the spirit of the season let me share a short story:
Three colleagues (all civil service) having saved regularly for rainy days thru a reputable bank in NY approached the bank manager for a large loan to buy roofs over their heads for their families. Being long time “star” customers who have kept their savings (so the bank can use their savings to make more money), the bank is happy to sanction their loans with the following proviso:
- Loan (+ interest) shall be returned in monthly installments in a manner that the principal + interest will be paid up/fully recovered by the 10th year.
- Assuming that it can instead invest the amount in Wall Street, the bank contends it is likely to profit even more, and so more windfall bonus can accrue to their managers who can enjoy luxury weekends. In the event of anything gone amiss, they may even qualify for government bailout!
- Therefore, the bank argued that the borrowers (loan recipients) have similar opportunity to make big money out of their loans (never mind about buying the essential tenement to live). This is despite the fact that the customer’s written reasons for the loan are be verifiable; it is not the bank’s culture to accept customers undertaking as 100% valid.
- So, the bank mandates that the monthly recovery of the loan will continue for the life-time!
Does the above story sound familiar with our situation (1/3 lump sum recipients)?! So, our UNJSPF quotes the following three so called mandates in denying the restoration of full pension after the loan (1/3 lump sum) recovery period.
- Regulation Article 1 (f) – “commute” shall mean cause to be converted and paid in a lump sum part or the whole of a benefit otherwise payable at periodic intervals, according to the actuarial tables of the Fund.
- Regulation Article 28 (g) – A benefit payable at the standard annual rate may be commuted by the participant into a lump sum subject to the following limitations and to supplementary article D, where applicable:
- Now, see what Article 43 – Recovery of indebtedness to the Fund, says: The Board may deduct from any benefit payable under these Regulations to a participant, or on his or her account, the amount of any indebtedness to the Fund by the participant or by any beneficiary or third person to whom payment has been made otherwise than in accordance with these Regulations, including interest and costs, where appropriate.
Come back to our story, ask and try and answer the following questions yourself. For example, the commuted lump sum means the loan from the bank, so the monthly repayments (including interest) will have to be based on the bank’s expert advice and calculations, in the determination of customer’s ability to make the repayment as agreed. Now, the actuarial experts who advise the UNJSPF determine the appropriate actuarial tables, to help arrive at commuted lump sum and how this is to be recovered thru monthly deduction in the normal pension. Do you believe that actuarial experts, worth the salt, will mandate that there should be life-long deduction?!
Think what if the Actuarial experts quoting the Article 1(f) “…. cause to be converted…” makes the UNJSPF to believe that the cause of conversion should be paid by life-time deductions by the pensioners. Then, where is the professional integrity, equity, fairness of such a judgment?
Can any expert, financial or otherwise, offer honest explanation as to what is “commutation” except that it is just an exchange or inter-change of one type for another. An authentic Oxford dictionary meaning: “to pay a single sum as an equivalent for a number of successive payments”. Or judicially speaking, reduce the severity of punishment and finally set free. Does it ever mean that once you become commuted lump-sum recipient, you are done for life?
Reading article 43 above, is it not correct to accept that the lump-sum payment is another form of indebtedness to the Fund, so much so Fund is at liberty to recover this indebtedness/loan to a specific target level? The UNAT will be asked to define the name of the lump-sum and in what way this is different from the indebtedness. Relief from indebtedness should be restored once the recovery is completed. This is the crux of the appeal.
Article 28(g) does not have much import in regard to the basic principles and questions raised in our appeals.
Here is an extract of the Pension payment instruction form PENS.E/7 for submission by prospective pensioners. Note this is not a promissory note nor mutually executed judicial document accepting life-time denial of full pension:
A. RETIREMENT BENEFIT FOR PARTICIPANTS WHO HAVE REACHED THE NORMAL RETIREMENT AGE (Article 28)
- Full pension in US$ . . . . .
- One-third lump sum, OR if less than one third, OR your contributions with interest if greater, AND the balance as a pension. This means renouncing all rights to a minimum pension . . . . .
Here is your quiz:
- What should be your reaction to the bank’s mandate that the loan should be repaid for life?
- How can you describe the UNJSPF’s mindset and behavior over the years?
- unnatural obduracy;
- inborn anachronism;
- simple refusal to accept the norms of natural justice, equity and fairness;
- “don’t care” attitude of the basic principles enshrined in UN Charter and UDHR;
- All the above.
- In the form PENS.E/7 – payment instruction – do you see any undertaking or mention that the Lump Sum will/should mean life-time denial of restoration of full pension?
- How many of you know that the Indian Government (at federal and provincial levels, representing one-sixth of humanity), directed by the Indian Supreme Court (judgment dated 9 Dec 1986 in writ petition # 3958-61 of 1983), restored full pension from 1984 for all reduced pensioners of 1/3 lump-sum recipients after 15 years. This is based on the principle of equity and fairness since the pension should be seen as deferred salary payment; hence no endless deduction and no inequity should be imposed beyond the full recovery or re-payment of the lump-sum. The Government is presently involved in reforming the system to ensure its integrity, sustainability and durability, not at the expense of sacrificing equity, fairness and justice to all pensioners.
Regards to all, Sincerely,
S.P. Sundaram / V. Muthuswami / G.S. Srinivasan
Appellants to the Common Cause Appeal