FC 97/16 |
| FC 97/16 |
Ninety-seventh Session |
Rome, 17 - 22 September 2001 |
Recommendations and Decisions of the ICSC and the UN Joint Staff Pension Board |
The purpose of this paper is to report on the decisions of the United Nations General Assembly (UNGA) at its 55th session (2000) and the United Nations Joint Staff Pension Board (UNJSPB) and to inform the Committee of recent developments in the activities of the International Civil Service Commission (ICSC) relevant to the conditions of service of staff in the Professional and higher categories and General Service staff.
I. Conditions of service of Staff in the Professional and Higher Categories
II. Remuneration of the General Service and other locally categories
III. Conditions of Service Applicable to Both Categories of Staff
1. The General Assembly reaffirmed the continued application of the Noblemaire principle and reaffirmed the need to continue to ensure the competitiveness of the conditions of service of the common system.
2. The General Assembly noted that the margin between the net remuneration of the United Nations staff in grades P-1 to D-2 level in New York and that of officials in comparable positions in the United States federal civil service for 2000 is 113.3 based on the results of the grade equivalency study between the United Nations and the United States carried out in 2000. It also noted that the United Nations/United States remuneration ratios range from 119.9 at the P-2 level to 105.5 at the D-2 level and considered that this imbalance should be addressed in the context of the overall margin considerations established by the General Assembly.
3. The General Assembly approved with effect from 1 March 2001 a revised scale of gross and net salaries for staff in the Professional and higher categories reflecting an increase of 5.1 per cent over the previous scale (effective 1 March 2000) as a result of a consolidation of 5.1 multiplier points of post adjustment. The new salary scale was implemented effective 1 March 2001. Since separation payments and mobility and hardship allowances are applied in conjunction with the base/floor salary scale, the amounts of these payments have also been increased by the same percentage (5.1 per cent) as of the same date.
4. The General Assembly requested the Commission, in the context of the review of the pay and benefits system to review the firm linkage between the base/floor salary scale and the mobility and hardship allowance.
5. The financial implications for FAO of this adjustment for the 10 months of 2001 are estimated at US$2 525 000.
6. The General Assembly approved with effect from 1 January 2001 an increase of 11.89 per cent in the children's allowance (including that for disabled children) and in the secondary dependant's allowance from US$1 730 p.a. to US$1 936 p.a. and from US$619 p.a. to US$692 p.a. respectively. The General Assembly noted the updated list of hard-currency duty stations for which allowances are specified in local currency and also that dependency allowances payable to eligible common system staff should not be reduced by the amount of any direct payments received from a Government in respect of dependants.
7. The financial implications for FAO of this adjustment for the year 2001 are estimated at US$207 000.
8. The General Assembly welcomed the review of the operation of the post adjustment system carried out by the Commission and took note of the decisions of the Commission on: the simplification of the post adjustment index structure; the list of items and specifications; procedures for establishment of expenditure weights; treatment of United States dollar-driven expenditures; treatment of housing data collected from staff; the procedures for price collection at headquarters duty stations and the selection of outlets
9. The levels for the Rome post adjustment classification, showing the fluctuations of the post adjustment multiplier relative to changes in the rate of exchange and the consolidation of 5.1 post adjustment multiplier points, were announced by the International Civil Service Commission (ICSC) from July 2000 to June 20011 as follows.
| Cost-of-living | Post Adjustment (Applying 4-month waiting period) | ||||
| Month | Index 2 | Month | Lire/Dollar Exchange Rate | Index | Multiplier |
| Mar. 2000 | 102.7 | July 2000 | 2035.02 | 103.3 | 3.3 |
| Apr. 2000 | 102.8 | Aug. 2000 | 2095.04 | 100.7 | 0.7 |
| May 2000 | 103.1 | Sep. 2000 | 2170.56 | 97.7 | 0.0 |
| June 2000 | 103.3 | Oct. 2000 | 2186.05 | 97.1 | 0.0 |
| July 2000 | 103.5 | Nov. 2000 | 2294.48 | 93.2 | 0.0 |
| Aug. 2000 | 103.6 | Dec. 2000 | 2238.52 | 95.2 | 0.0 |
| Sep. 2000 | 103.7 | Jan. 2001 | 2080.91 | 101.3 | 1.3 |
| Oct. 2000 | 104.1 | Feb. 2001 | 2106.66 | 100.3 | 0.3 |
| Nov. 2000 | 104.4 p | Mar. 2001 | 2112.47 | 95.2 | 0.0 |
| Dec. 2000 | 104.6 p | Apr. 2001 | 2189.92 | 92.3 | 0.0 |
| Jan. 2001 | 104.9 p | May 2001 | 2162.81 | 93.3 | 0.0 |
| Feb. 2001 | 105.2 p | June 2001 | 2259.63 | 89.8 | 0.0 |
10. From September to December 2000 the index decreased below one hundred due to the strengthening of the US dollar to the Lira. This would have implied a negative classification of the post adjustment and, therefore, a decrease in pay below the base salary. In accordance with the current ICSC procedures, however, this is not permissible. Accordingly, the applicable multiplier remained fixed at zero level.
11. In March 2001, further to the General Assembly resolution, a consolidation of 5.1 post adjustment multiplier points was implemented. As a result of this the Post Adjustment Index (PAI) dropped to 95.2 at the rate of exchange of Lire 2 112.47 to US$1. As the multiplier was maintained at zero level, this resulted in a real increase in pay of 4.8 per cent in US dollar terms over the previous month.
12. From April to June 2001 the combined effect of the consolidation of 5.1 post adjustment multiplier points and a further strengthening of the US dollar maintained the PAI constantly below one hundred, and as explained above, the post adjustment multiplier continued to be maintained at zero level.
13. The level of post adjustment is determined by periodic place-to-place surveys conducted by the ICSC secretariat every four to five years. The purpose of these surveys is to determine the cost-of-living relationship between the surveyed duty station and New York, which is the base of the post adjustment system.
14. A comprehensive place-to-place cost-of-living survey was carried out by the secretariat of the ICSC in Rome, in October 2000. The survey covered price data collection and index calculations for a basket of goods and services including housing and domestic service costs. In addition to the price collection, international officials in grades P-1 to D-1 were requested to report on their housing and domestic service costs. Additionally, a sample of international officials in grades P-1 through D-1 was requested to report on their household expenditures.
15. The results of the comparison (average prices of individual items found in Rome and New York) showed that the cost-of-living index for Rome in October 2000 was 76.63 on the base New York June 2000 = 100 at the exchange rate of L 2 186.05 to the United States dollar. This resulted in a post adjustment index for October 2000 of 112.15.
16. The relevant report prepared by the secretariat of the ICSC was reviewed and confirmed by the Advisory Committee on Post Adjustment Questions (ACPAQ) in March 2001 and submitted to the ICSC for final approval.
17. At its 53rd session (June 2001), the ICSC reviewed the report and approved the result of the place-to-place survey for Rome (12.2 post adjustment multiplier points at the October 2000 rate of exchange of Lire 2 186.05 to US$1).
18. The result of the place-to-place survey is normally implemented in the month after its final approval. In July, therefore, the ICSC announced that, as a result of the place-to-place survey, the post adjustment for that month was equal to 4.6 multiplier points at the rate of exchange of Italian Lire 2 277.05 to US$1.
19. In establishing the post adjustment multiplier for the month of July 2001, due account was taken of the effect of the March 2001 consolidation of 5.1 per cent multiplier points into the base/floor, which on a "no-loss no-gain basis", would have resulted in a notional post adjustment multiplier for that month of 6.7 at the October 2000 rate of exchange of Lire 2 186.05 to US$1.
20. The ICSC, on the basis of the Place-to-Place Survey, also revised the rental thresholds for Rome as follows: at dependency rate from 18 to 20 per cent and at single rate from 20 to 22 per cent with effect from 1 July 2001.
21. Based on Table I, the following graph shows the variations in net salary, at P-4. step VI, due to the monthly fluctuations of the Italian lira to the US dollar, as well as the impact of the last place-to-place survey.
The following graph shows the corresponding monthly salary in Italian lire and the effect of the local inflation on net purchasing power
22. The General Assembly noted that the Commission, with regard to the treatment of the language factor, had decided that:
23. The International Civil Service Commission (ICSC), under article 12.1 of its statute, undertook surveys of best prevailing conditions of employment in Rome in1979, 1984, 1989 and 1994. At its forty-fifth session (April/May 1997), the Commission approved the timetable for the fifth round of General Service salary surveys at headquarters locations and decided that preparations for the next salary survey in Rome should be carried out in the spring of 2000. Data collection would take place in the autumn of 2000, followed by consideration of the survey results at the spring 2001 session. At its forty-sixth session, the Commission also approved revisions to the general methodology for General Service salary surveys at headquarters duty stations, on the basis of which the Rome survey was conducted.
24. In March 2000, a Local Salary Survey Committee (LSSC) was established comprising representatives of the Administration and staff of FAO, IFAD and WFP.
25. The LSSC developed a questionnaire and nineteen benchmark job descriptions to be used in collecting data for the survey and identified twenty-one of the best employers in the Rome labour market for comparisons purposes. In September 2000, the Chairman of ICSC, under the authority delegated to him by the Commission, approved the survey jobs, the survey job descriptions, the main and reserve lists of employers and the survey questionnaire.
26. These employers were contacted formally by the Organization. Of the 21 employers on the main list, four declined and 17 agreed to participate in the survey. Seven of the employers on the reserve list were therefore invited to participate, four of which agreed to take part.
27. The principal data collection took place between November and December 2000. Additional interviews were conducted in January, February, March and April 2001. All data collected related to the reference month of November 2000. The information collected was compiled by the ICSC secretariat and entered into a computerized database for analysis. This database and a copy of the draft report from the ICSC secretariat were made available to the LSSC for review and comments.
28. The LSSC recognized that the survey was conducted in a transparent manner. It agreed with the data analysis made by the ICSC secretariat but noted that the "language factor" for the determination of the revised salary scale was still a major controversial item. It, therefore, decided to prepare and submit a note for consideration to the ICSC, explaining the rationale for the retention of this factor in the determination of the final result of the salary survey.
29. It is recalled that at the time of the last comprehensive salary survey (November 1994) the ICSC had decided to eliminate the language factor, as it considered that local salary scales based on best prevailing local conditions would themselves be sufficient to recruit and retain staff with the required language abilities. In line with the methodology, therefore, the Commission decided on a phased approach to the elimination of the language factor.
30. Following the implementation of the salary scale resulting from the 1994 comprehensive salary survey, several staff members firstly lodged appeals with the Director-General and then lodged formal complaints with the International Labour Organisation Administrative Tribunal (ILOAT). The ILO Tribunal, in its Judgement 1713 delivered on 29 January 1998, set aside the Director-General's decision to reject the complainant's appeal against the gradual elimination (phasing-out) of the language factor. It was, therefore, re-introduced into the salary scale for the General Service category.
31. The ICSC reviewed the salary survey report submitted by the secretariat at its 53rd session (June 2001). Representatives of administrations and staff of the Rome-based organizations attended this session and had the opportunity to present their views on the findings of the salary survey and the application of the methodology as well as on the language factor.
32. The ICSC, after having heard the views of the representatives of the administration and the staff of the Rome-based organizations decided on the basis of the results of the survey:
Dependent spouse |
Lire 1,531,000 per annum |
Dependent child (for eligible staff already in receipt of amount prior to1 November 1998) |
Lire 2,086,000 per annum |
Dependent child (for eligible staff already in receipt of amount on or after1 November 1998) |
Lire 1,903,000 per annum |
Secondary dependant |
Lire 408,000 per annum |
33. The Director-General, having reviewed the recommendations made by the Commission, concurs with the findings of the International Civil Service Commission and recommends their adoption, including implementation effective 1 November 2000 of the salary scale in Annex I, by the Finance Committee and the Council 1.
34. The General Assembly reaffirmed its commitment to a single unified United Nations common system and reaffirmed the central role of the Commission in the regulation and co-ordination of conditions of service of the United Nations common system.
35. The General Assembly welcomed the work of the Commission with regard to the integrated framework for human resources management, which would assist the organizations of the common system to carry forward human resources management reforms. It requested the Commission to use the integrated framework for human resources management as a guide to its future work programme and encouraged the organizations to use it as a basis for their future work in human resources policies and procedures and to bring it to the attention of their governing bodies.
36. The General Assembly urged organizations to reach consensus on draft standards of conduct in sufficient time so as to enable the Commission to finalize the text to be submitted to the General Assembly at its fifty-sixth session and emphasized that the proposed standards should ensure that staff uphold the principles of integrity, impartiality and independence.
37. The General Assembly took note of the work of the Commission in respect of the pay and benefits system in the context of the integrated framework for human resources management and also noted the decision of the Commission to move forward with the review in accordance with the modalities described in its report.
38. The General Assembly took note of the Commission's decision to address the issue of recognition of language knowledge within the context of the comprehensive review of the pay and benefits system.
39. The General Assembly approved increases, applicable as from the school year in progress on 1 January 2001, to the maximum reimbursement levels in areas where education-related expenses were incurred in Belgian francs, Irish pounds, Italian lire, Swiss franc and United States dollars in the United States.
The revised amounts for the Italian lira is:
40. The financial implications for FAO of this adjustment for the year 2001 are estimated at US$76 000.
41. The General Assembly decided to defer consideration of the reports of the Secretary-General with a view to taking a decision on strengthening the international civil service at the first part of its resumed fifty-fifth session.
42. Between the fifty-first and fifty-second sessions of the ICSC, the organizations were asked to provide final comments to ensure that the Commission's revisions were consistent with the organizations legal instruments and legislative framework. However, at its fifty-second session (2000), the Commission noted the request by CCAQ on behalf of the organizations to provide them with the opportunity of a final review of the draft standards of conduct for the international civil service and to present specific comments.
43. Following consultations with the Secretary and President of CCAQ, a consultant was then engaged to redraft the Commission's draft in a more inspirational language and to take into account the comments made by organizations. A revised text, which brings together the views of all parties, was discussed during the ICSC session in Montreal and a consensus was reached on a final version of the standards of conduct to be presented to the General Assembly at its fifty-sixth session.
44. At its fifty-second session (2000) the Commission decided to proceed with the review of the pay and benefits system and to establish mechanisms to allow for the broadest possible participation and discussion on the part of the organizations and the staff. Under the co-ordination of a Steering Committee, three open-ended focus groups were established to discuss specific topics: The Nature of Work, Rewarding Contribution and Management Capacity.
45. A report which synthesizes the work of the focus groups and contains recommendations was prepared by the Steering Committee. The review was approached with the recognition that the pay system is a management tool and must be developed in the context of overall organizational strategies; this approach was seen as a crucial underpinning of reform programmes underway in most common system organizations that are aimed at improving organizational effectiveness. The key themes addressed in the report are that:
46. The Commission discussed the report of the Steering Committee and the related focus group reports, and decided to report on the contents of its discussions and progress made to the General Assembly at its fifty-sixth session.
47. The General Assembly took note of the decision of the Board to lower the interest rate used to determine lump-sum commutations, from the current 6.5 per cent to 6 per cent, with respect to contributory service performed as from 1 January 2001.
48. The General Assembly approved lowering the threshold for implementing cost-of -living adjustments of pensions in award from 3 per cent to 2 per cent, with effect from the adjustment due on 1 April 2001. The cost of the reduced threshold was 0.15% of Pensionable Remuneration. There was a gross actuarial surplus of 4.25% so this still left a surplus of 4.10%.
49. The General Assembly approved amendments to articles 35 bis, 34, 34 (b) and 45 regarding entitlements to survivors' benefits for spouses and former spouses.
50. The General Assembly took note of the information on the strategic plan for the operations of the Fund, which addresses computer system, process re-engineering and technological improvements, the progress report on the enhancement of the role of the Geneva Office of the Fund, the delegation of personnel and procurement decisions to the Fund, and office space needs.
51. The Standing Committee of the Pension Board held its regular session in July 2001 and its outcome will be the subject of an oral briefing to the Committee.
ANNEX 1
RECOMMENDED NET SALARY SCALE FOR STAFF IN THE GENERAL SERVICE
AND OTHER LOCALLY RECRUITED CATEGORIES IN ROME
(in thousands of lire as of 1 November 2000)
| Grade | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 |
| G-1 | 41 631 | 42 863 | 44 095 | 45 327 | 46 559 | 47 791 | 49 023 | 50 255 | 51 487 | 52 719 | 53 951 | 55 183 | 56 415 | 57 647 | 58 879 |
| G-2 | 44 128 | 45 628 | 47 128 | 48 628 | 50 128 | 51 628 | 53 128 | 54 628 | 56 128 | 57 628 | 59 128 | 60 628 | 62 128 | 63 628 | 65 128 |
| G-3 | 47 220 | 49 019 | 50 818 | 2 617 | 54 416 | 56 215 | 58 014 | 59 813 | 61 612 | 63 411 | 65 210 | 67 009 | 68 808 | 70 607 | 72 406 |
| G-4 | 51 471 | 53 576 | 55 681 | 57 786 | 59 891 | 61 996 | 64 101 | 66 206 | 68 311 | 70 416 | 72 521 | 74 626 | 76 731 | 78 836 | 80 941 |
| G-5 | 57 122 | 59 544 | 61 966 | 64 388 | 66 810 | 69 232 | 71 654 | 74 076 | 76 498 | 78 920 | 81 342 | 83 764 | 86 186 | 88 608 | 91 030 |
| G-6 | 65 695 | 68 454 | 71 213 | 73 972 | 76 731 | 79 490 | 82 249 | 85 008 | 87 767 | 90 526 | 93 285 | 96 044 | 98 803 | 101 562 | 104 321 |
| G-7 | 75 545 | 78 733 | 81 921 | 85 109 | 88 297 | 91 485 | 94 673 | 97 861 | 101 049 | 104 237 | 107 425 | 110 613 |
1 From July 2001, please see below regarding the result of the place-to-place cost-of-living survey in Rome
2 Index of cost-of-living for international officials in Rome using a constant rate of exchange. Please note that the index has been re-based effective 1 November 1995, date of the last cost-of-living survey.