GAC-EPA — Groupement des Anciens du CERN-ESO Pensioners' Association

Announcement 2014-02-24

Letter to the President of the CERN Council

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(you can consult the list of questions that is mentioned below)

 



Letterhead Staff Association

President

CERN
CH - 1211 GENEVE 23

Téléphone/Telephone: 41/22/767 3738
Télécopieur/Telefax: 41/22/785 1002
Site web http://association.cern.ch/

Votre référence/Your reference
Notre référence/Our reference AP/MG/mg/2014/sw

Professor Agnieszka Zalewska
President of CERN Council
Council Secretariat
CERN DG-CS

Geneva, 30 January 2014

Madam President,

The Staff Association has been informed that the Permanent Mission of             (*) has sent a memo “Questions and considerations regarding the Future of the CERN Pension Fund” to “all CERN bodies concerned, including the members of the Finance Committee and Council”. In view of demands made in this memo the CERN Staff Association would like to express its great surprise and point out basic procedural problems, to which it firmly objects.

Demands based on preliminary and non-consolidated results

The memo in question refers to document CERN/FC/5782/RA "Pension Fund, 2013 Periodic Actuarial Review", which contains preliminary results of the Periodic Actuarial Review of the CERN Pension Fund as at 1 January 2013 performed by the actuary Buck Consultants.

This document has not been discussed by the Pension Fund Governing Board (PFGB), and in particular certain assumptions and scenarios have never been validated by that body. Indeed, the President of the PFGB, Dr Roth, writes in the cover letter to the Buck report that “These assumptions [put forward by Bock in the report] are very interesting, but they are also totally new, and the PFGB has not had sufficient time to examine them as closely as required.”  Furthermore, in the concluding paragraph, he writes “I would therefore suggest that the Council invite the PFGB to examine the assumptions used and the methodology applied by our new Actuary in more detail and report back to the Finance Committee and the Council in spring 2014 on the basis of a more focused analysis that would allow conclusions to be drawn which might lead to actions, if necessary.”

However, questions in the memo are in contradiction with this logical demand of the President of the PFGB and are based on particular assumption not yet examined by that body.

Comply with the PFGB Governance structure and Council resolution

Indeed, Article I 2.05 of the Rules and Regulations of the CERN Pension Fund, “Functions of the Governing Board”, states

  1. The Governing Board shall be entrusted by the Council with the overall management of the Fund and shall, in this regard, in particular:
    […]
    e) oversee the activities of the Investment Committee and the Actuarial and Technical Committee, and decide on any proposals or measures submitted by them;
    […]

  2. The Governing Board shall be responsible for advising the Council on any issues relating to the financial position of the Fund and shall, in this regard, in particular:
    […]
    b) propose to the Council any measures aimed at securing, restoring or maintaining the actuarial balance of the Fund, it being understood that proposals relating to benefits and contributions shall remain within the competence of the Director-General;
    […]

Many of the questions of the             (*) Delegation assume basic changes of employment conditions, incompatible with the above. Indeed, when the PFGB considers, after careful study of the actuarial results, that actions are necessary, it should report to Council, which then invites the Director General to study correctives measures within the framework of the concertation process. Moreover, such measures must be compatible with the Council Resolution, which requires maintaining an equitable distribution model 1. This constraint has been ignored in the questions submitted which are thus in contradiction with that Resolution.

Conclusion

The Staff Association urges the Council President to remind delegations to respect the roles of the various bodies it has created and the rules that govern them.

Sincerely yours,

Michel Goossens
President CERN Staff Association
Gertjan Bossen
President GAC-EPA
Copies:Mrs C. Jamieson, Chairperson of Finance Committee
Dr T. Roth, Chairman of the PFGB
Prof. R.D. Heuer, Director-General

 

1 CERN/2972 (10 June 2011) “Proposal by the Management concerning the completion of the package of measures towards restoring full funding of the CERN Pension Fund”, Annex 2 contains the “Council Resolution on the restoration of full funding of the CERN Pension Fund”, which was approved by Council in its meeting of the 23 June 2011 and which states that the four elements of the “balanced and equitable package”, were “premised on the understanding that, inter alia:

(i) individual components of the package may not be revised without revision of the entire package;

(ii) any future revision shall maintain the equitable distribution model contained in CERN/FC/5498-CERN/2947”.

CERN/2947 (2 Dec. 2010) “Proposals by the Management concerning a package of measures towards restoring full funding of the Pension Fund”, Part V, Conclusions

“The Management considers that the proposal contained herein [with its four elements] constitutes a balanced and equitable package, aimed at reaching full funding of the CERN Pension Fund as soon as possible. It is premised upon the understanding that the four elements are equitably distributed between all stakeholders and, thus, interdependent. Accordingly, individual elements may not be revised without revision of the entire package; any such future revision shall maintain the equitable distribution model contained herein. […]”


 

(*) The name of the Member State has been deliberately omitted.

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