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

Announcement

Future of the Pension Fund

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Proposal1 for a CERN FC resolution regarding the CERN Pension Fund:

Preamble

The CERN Finance Committee,

  1. having considered the 2013 Periodic Actuarial Review and the presentations given to FC and Council by the Actuary at tneir meetings in December 2013,
  2. expressing its appreciation to the PFGB for the work it has accomplished to present the financial situation of the Pension Fund and for the answers it has provided so far to questions asked by FC and Council members,
  3. mindful of the fact that due to demographic trends to be observed over the last decades, especially a marked rise in longevity, the financial liabilities of the CERN Pension Fund have reached a much higher level than could possibly have been anticipated at the time when the present CERN social security system was conceived,
  4. taking note with appreciation that the package of Pension Fund-related measures adopted in 2010 has had a positive impact on the projected financial situation of the CERN Pension Fund,
  5. expressing its concern that, in the light of uncertainty regarding future investment returns and of the most recent mortality assumptions relevant for the CERN Pension Fund, the aforementioned package is likely to be insufficient to insure the full funding of the CERN Pension Fund by 2041 and that therefore a significant risk remains that CERN Member States will be called on to provide additional extraordinary funding in the future, over and above the amount of 60MCHF per year,
  6. taking into account that the cost of any increase in extraordinary contributions to the CERN Pension Fund will ultimately be borne by CERN's Member States and would therefore threaten the funding available for the Organization's primary scientific mission,
  7. considering that the level of exposure of CERN Member States to financial risks arising from the CERN Pension Fund has to be examined and monitored thoroughly by the Finance Committee as well as by the Council, and that, in accordance with the results of this effort, effective and additional measures must be taken to limit and reduce such risks as much as and as soon as possible,
  8. expressing its conviction that any actions deemed necessary in order to ensure the full availability of the research budget necessary for the Organization's primary scientific mission and the financial viability of the CERN Pension Fund need to be based on open-minded and transparent consultations in the relevant fora among all stakeholders, including representatives of CERN's staff,

Recommendations

  1. requests the CERN Pension Fund Governing Board to continue to work as expeditiously as possible, using all available means at its disposal, to further refine its analysis and projections of the Pension Fund's financial situation on a best estimate basis, and to regularly inform the FC on its progress in acting on questions and concerns expressed by FC and Council,
  2. recommends that Council mandate the Actuary to present a study comparing the amount and type of benefits for employees and of financial risks borne by the employer in the CERN pension system with the situation for Swiss employees respectively employers under the relevant legislation governing the Swiss social security system and the operations of Swiss Pension Funds,
  3. further recommends that Council mandate the Actuary to study the financial risk for CERN and its Member States to be called on to provide additional extraordinary funding to the Pension Fund and to recommend to Council how to reduce or eliminate this risk,
  4. suggests that Council mandate an independent expert study of measures which could be taken to offset the impact of recent significant increases in longevity on the financial liabilities of the CERN Pension Fund, helping to reduce the amount of CERN Member States' extraordinary contributions to the CERN Pension Fund as much as possible and with a view to ensure the CERN Pension Fund's financial viability without such extraordinary contributions from, at the latest, 2019 onward,
  5. further suggests that Council mandate an independent expert study on the legal obligations of CERN with regard to the type and extent of pension insurance it must provide to its staff in light of the agreements between CERN and its Host States, the Convention for the establishment of a European Organization for Nuclear Research (as amended), any other relevant international norms and of developments in the operation of pension schemes in CERN Member States. This study should also address the issue of the extent to which economic and demographic developments in CERN Member States can impact on the abovementioned legal obligations of CERN.

1 The name of the Member State has been deliberately omitted.

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