EU Presidency Statement - United Nations Pension System

Mr. Chairman,

I have the honour to speak on behalf of the EU. The Candidate Countries Bulgaria, Romania, Turkey and Croatia, the Countries of the Stabilisation and Association Process and potential candidates Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Serbia and Montenegro, and the EFTA countries Iceland and Liechtenstein, members of the European Economic Area, align themselves with this declaration.

Mr. Chairman,

At the offset, allow me to thank Mr. Busca for introducing the report containing the valuable work of the Joint Staff Pension Board, Ms. Bertini for presenting the report on the investments of the Pension Fund, and the ACABQ for their related report.

For good reason, the EU attaches great importance to this particular agenda item. It is not the merely the scope of the Fund's assets (USD 26.2 billion) that deserves our particular scrutiny; it is the fact that this money contributes to a secure retirement for all UN employees. They need the assurance that their savings are well managed and properly invested.

Mr. Chairman,

The EU has noted with satisfaction the observations on the Fund's performance contained in the reports before us today. We are pleased that the actuarial valuation of the Fund revealed a positive result for the fourth time in succession, and that the investment policy of the Fund has slightly outperformed the benchmark over the last twenty years. Also, the 55% increase of the Fund's investments in developing countries should be appreciated. Of course, due to the unpredictable nature of currency markets and stock markets, we urge the Fund to remain prudent with its investments policy, and to allocate the current surplus wisely.

Mr. Chairman,

The EU does have some concerns on several issues raised by the Board of Auditors, most notably on the low implementation rate of the recommendations of the Auditors. Out of all the UN-entities audited by the BoA, the Pension Fund faired the worst: out of 27 recommendations, 11 recommendations (41%) were only partially implemented, while 9 (33%) had not been implemented at all. One of the recommendations of particular importance would be the establishment of an Audit Committee. We have noted the decision of the Pension Board to defer a decision on this matter to the Standing Committee in 2005. We understand that such matters need to be looked at carefully, but we expect to see this particular recommendation resolved within two years time. While being on the subject of internal audits, we were however pleased to note the improved cooperation between the Fund and OIOS on the issue of internal audit arrangements.

Lastly, Mr. Chairman, although we in principle agree with the decisions that are in front of us under this agenda item, we will ask some questions on them during our informal deliberations. In this regard, we share the particular concern of the ACABQ on the upward trend in administrative expenditures of the Fund.

Thank you, Mr. Chairman.

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