Bulletin 31

Autumn 2005

  1. President's Remarks
  2. Editorial
  3. Committee Activities
  4. Permanences
  5. Obituary
  6. The CERN Health Insurance Scheme (CHIS)
  7. The Pension Fund
  8. SCC Working Group on Pension Guarantees

President's Remarks

(Original French)
In this bulletin you will find in detail all our different actions; the most important concerning the Pension fund. If we are on the way to a satisfactory compromise, we must nevertheless not relax our vigilance until the CERN Council has taken its decision.

Everyone amongst you will find the minutes of the morning of the 50th anniversary in the form of a high quality report which will be a witness to your participation in the success of CERN. I warmly thank the editors, Jean-Marie Thomas and Carlo Vandoni, and the CERN staff who helped to bring about this success.

At our next Christmas drink on 7 December, to which you are cordially invited, we will clarify our position on the question of the Pension fund.

Philippe BERNARD

Editorial

(Original French)
After the summer period, which will have been for most of you (at least that is what your editor hopes) a period of visits, journeys and cultural enrichment, your committee invites you to resume our regular work.

Many thanks to our delegates at the Pension fund for having pursued our interests throughout the whole summer: you will find their report in the annex.

We include in this mail the yellow report of the 50th anniversary day (with thanks to CERN) where many of you participated : there are still DVDs available for those interested!

Do not forget to vote to elect your next committee… and consider seriously joining this sympathetic team next year!

Jean-Marie THOMAS

Committee Activities

(Original French)

March to september 2005

The committee, comprising 19 members following the elections held in November 2004, was increased to 20 members with the co-opting of R. Cailliau as an expert for the development of our Web site. The Committee met 5 times during this period under its president Philippe Bernard with an average participation of 15 members. The most important points raised were the following :

Statutary Activities

1. Next elections

We are legally obliged partially to renew the Committee in December 2005, the mandate of the following 8 of the 19 members ending on 31 December 2005 :

We must also re-elect auditors of the accounts since the mandate of the present auditors also comes to an end:

The Committee thanks them for their help in the two preceding elections and in earlier exercises.

A call for candidates for these two categories of election has just been sent out. We hope that you will be numerous to reply to permit the correct operation of GAC and thus ensure its continuation.

2. GAC General Assembly

The General Assembly was held on 6 April 2005 with the participation of 300 members present and 160 members represented. You received the minutes of this meeting by a recent mail.

Relations with the Staff Association

Our excellent contacts with the Staff Association have above all been concerned with the problems of the progressive deterioration of the rates of our Pension Fund. The Association has defended a strategy of return to equilibrium of the Fund which is essential to guarantee the pensions of retirees present and future and authorizing at least a partial indexation of our pensions to follow the cost of living index. On the other hand it is necessary to admit balanced sacrifices on the part of the three groups of participants in our Pension Fund : the retired beneficiaries, the active contributing staff and the Member States. The article of J-F. Barthélemy and F. Wittgenstein will give you full information on this subject.

The committee approves this strategy because it improves the long-term guarantee of the pensions at the price of a financial effort equally shared but maintains the appeal against the non-indexation of pensions lodged at BIT until the Council takes its decision on the strategy proposed. We will announce any future step we may take after this decision.

Other articles of our delegates in this bulletin will give you the latest information on the state of our health insurance and on the progress of the project of the working group on the guarantee of our pensions.

Relation with retirees present and future

There were 5 meetings of the permanence group consisting of 3 GAC members during the period covered, replying to questions on retirement of future and new pensioners or to retirees preoccupied by a particular problem in this area.

Our Web site under the reponsibility of J. Allaby is now operational. We thank R. Cailliau for the invaluable help which he has given in this development. We thank him also for agreeing to be a coopted GAC member to continue his work in this domain. The Web site address is :

http://www.cern.ch/GAC

The next occasion for us to get together will be our Christmas drink planned for Wednesday 7 December at 16.30. You will receive the invitation with all details in due course.

Conclusion of the 50th anniversary of CERN

The yellow report reproducing the presentations of F. Bonaudi, G. Plass and D. Treille at the retirees day in the framework of the 50th anniversary of CERN is now available. It was prepared by our colleagues C-E. Vandoni and J-M. Thomas, with the invaluable help of Christine Vanoli (IT-EXT). It is included in the present mailing.

Olivier BAYARD

Permanences

(Original français)

March to September 2005

Since our last bulletin number 30, published in Spring, the meetings of the permanences have been regularly held each first Tuesday each month.

We are always very attentive to questions and problems posed, or on the point of being posed, by our retired colleagues and we try to give our help.

In view of the number of persons who come into our office (conference room of the Staff Association by the Cafeteria) we note with a certain satisfaction the usefulness of the permanences.

Thus, in March we have received 7 people, in April again 7, in May 5, in June 2 and in September 3. All this between 14.00 and 17.00.

As related in our preceding bulletin, problems related to CRDS, CSG on pensions allotted by CERN are resolved. On the other hand, in France … the Tresor Public overlooks no-one if there are French incomes (pension, retirement, inheritance etc….)

Even if you have no particular questions for us, do not hesitate to pay us a visit because sometimes unanticipated discussions open up other horizons !

Since we are at the end of the year, the permanence team sends you its most sincere wishes for 2006 and wishes you the best possible health. We have a friendly thought for our tired colleagues. That people who are alone keep up their courage and morale. There are certainly small children around them who need their love.

Happy New Year, good health and we look forward
to the pleasure of seeing you once more.

Françoise BEETSCHEN-BUTTAY, Mario CESELLI, Cynthia SHARP

Obituary

We have learned with regret of the deaths of our former colleagues named below:

Yvette CHOLLEY ex-EP 27 February 2005
Alain-Arthur BEZAGUET ex-LHC 22 March 2005
Marcel Lucien LANGOT ex-EF 2 April 2005
André DECOMBAZ ex-SB 7 April 2005
Charles SCHLATTER ex-SB 5 May 2005
Claude-René RENAUDOT ex-ST 11 May 2005
Julio VIDAL-MILEGO ex-LEP 20 May 2005
Henri CROCHAT ex-SB 30 May 2005
Hugo DUBLER ex-SPS 7 June 2005
Georges LASSIS ex-TIS 7 June 2005
Pierre CHEVALLEY ex-FI 22 June 2005
Ernest BOHNENBLUST ex-SPS 5 July 2005
France PROST ex-PS 17 July 2005
Henri BERTRAND ex-EP 29 July 2005
Marcel VALCESCHINI ex-ST 12 August 2005
Georges-Henri REGAT ex-SPS 11 August 2005
Varoujan ATTARIAN ex-DSU 9 September 2005
Joseph CHETCUTI ex-EF 5 October 2005

and of the death of other beneficiaries of the Pension Fund:

Lucie JOTTERAND (veuve de Louis, ex-ST) 7 May 2005
Martha SCHNEUWLY (veuve de Jean, ex-PS) 28 May 2005
Emilienne CHALON (veuve de Raymond, ex-SB) 6 June 2005
Irene GEX (veuve de Robert Charles, ex-ISR) 22 June 2005
Françoise MONNIER (veuve de Bernard, ex-ISR) 11 July 2005
Gabrielle DE RAUW (veuve de Jean, ex-SB) 31 July 2005
Ragnhild HUGI-LORENZEN (veuve de Ernst, ex-SPS) 4 August 2005
Lucienne BERTUOL (veuve d'Albert, ex-SPS) 6 August 2005
Patricia PRATER (veuve de Donald, ex-DG) 12 September 2005
Christiane JANON (veuve de Gaetan, ex- ) 28 September 2005

On behalf of all members of GAC, the Committee sends its sincerest sympathy to the bereaved families.

If you wish to write a word of sympathy to the bereaved family you can send it via the CERN Pension Fund, which has the address but is not authorised to give it to third parties.

The CERN Health Insurance Scheme (CHIS)

(Original French)

Accounts of CHIS 2004

The 2004 exercise has terminated with an excess of contributions of 4.8 MCHF, to be compared with a total contribution of 57 MCHF; this sum has been placed in the reserve of CHIS. This result allows one to think that the contribution should stay the same in 2006, even though the first six months of 2005 finished with an increase of more than 5% in repayments. We see the effect of age as partially responsible for this increase.

Equivalence with LAMal

We have received a letter from the Geneva Authorities which recognizes that our coverage is at least equivalent to that of LAMal; this recognition should permit the acceptation of the requests for exemption from LAMal.

Long Term Care Insurance

134 cases were examined, of which 11 re-evaluations and 122 were recognized as dependents at diverse degrees. 41 of these persons have died and 71 are currently under care. Indemnities at the level of 1.8 MCHF were paid under this heading in 2004. The daily indemnity in the case of a recognized dependance has remained at the same level since its start, 85 CHF per day in the case of serious dependance; while during this period the costs of hospitalisation have increased significantly. The CHIS Board has started an actuarial study to determine in which measure this indemnity may be reviewed.

The management of capital for LTC (Long Term Care) should be entrusted to the Pension Fund. We await for this the authorization of the CERN Council to effect the transfer of funds, currently in the hands of CERN.

Miscellaneous

We have noted a substantial increase in repayments of charges from the Hôpital de la Tour in the first six months of 2005. We remind you that, even if this establishment has concluded an agreement with us, it is particularly burdensome.

Jean-Paul Diss, Pierre Lazeyras, Robert Muzelier

The Pension Fund

Restoring the equilibrium of the Pension Fund (report dated 12 September 2005)

In the previous Bulletin we stated that the Governing Board planned to present its recommendations on the first of July 2005.

In fact on the seventh of July the Governing Board of the Pension Fund approved all except one of the recommendations of the Actuarial Working Group (GTA) and sent them to the Director General who will transmit them, with his recommendations, to TREF, to the Finance Committee and to Council.

The Working Group has pursued 3 objectives covering an actuarial period of 30 years

1st stage: to be implemented as soon as possible

  1. Stabilise the cover, limiting foreseeable deterioration,
  2. Eliminate the shortfall in cover, bringing it up to 100%.

2nd stage:

  1. Identify other measures which would further the objectives noted in the first stage.

To achieve these aims, the GTA has taken into account a change in the actual parameters of the fund, as recommended by the actuary for some time now, and has taken account in the actuarial calculations the financial compensations consequent upon reductions in CERN personnel, decided by the Organisation, and he has adapted the procedure for calculating the mathematical reserve for staff members who leave the Organisation after more than five years of service.

In the course of these discussions, the GTA has become convinced that the CERN Pension Fund cannot be treated as a public Fund, where the cover is often less than 100%, a political notion justified by the supposition that the guarantor States will effectively endure indefinitely.

The parameters

The table below shows the basic actuarial parameters employed:

PARAMETER Previous value (%) New value (%)
Inflation 3 2
Pension indexation 3 2
Salary indexation 3.5 2
Net yield 3 3
Technical actuarial rate 5.5 4.5

These new values accord with those used by other Pension Funds. Introducing them into the actuarial models of the Fund yields the following values for the cover:

MODEL COVER
(end 2004, %)
COVER
(end 2033, %)
previous (M19) 98.6 74.0
new (M120) 88.2 60.8

To attain the objectives cited above, the cover must be increased by some 40 percentage points.

Recommendations

Increases are expressed in percentage points as at end 2033, while recommendations 1 to 6 are intended for immediate application. Other recommendations will require further analysis.

1. Accept the new parameters (M120)

2. Include in the actuarial calculations compensations for the reduction in personnel (M121)

gain: 4.6

3. Modify the actuarial calculation by introducing real values for transferred and deferred pensions of persons leaving CERN after more than 5 years service (M122)

gain: 2.3

4. Suppression of Pension indexation for 2005

gain: 4.7

5. Increase contributions by 3% (1%+2%)

gain: 15.5

6. Pension indexation, a most important factor in the calculation of the equilibrium of the Fund, should support the raising of the complement of some 13 points. To this end, it is proposed that pensions be indexed each year at 82.5% of the Geneva cost of living index (COL August - August). This reduction factor will be re-examined every 3 years in the light of the actuarial survey, therefore of three financial exercises (next review 2007). Nonetheless, in order to impose a limit on the loss of pensioners' purchasing power, an individual ceiling, which will include the loss of 1.7% in 2005 (for those concerned) has been fixed at 8%. Previous years will not be taken into account. In other words, a person who was a pensioner at 31 December 2004 and who suffers a loss in purchasing power in excess of 6.3% in the forthcoming years would be indexed at 100% of the COL. (The counterpart of this concession is the establishment of a stable indexation of pensions).

7. The following measures, 7 to 11, require further analysis. They concern recalculating transfer values for those concerned, and particularly the introduction of a factor taking into account the age of the person concerned.

8. Assumptions and parameters connected with the constitution of a reserve, known as a longevity reserve, should be reviewed on a regular basis.

9. Methods involving conditional indexation and the calculation of variable contributions depending on financial results must be examined.

10. After the introduction of recommendations 1 to 6, the statutes of the Fund should be reviewed to make them more clear and coherent, and to limit certain abuses.

11. As almost 90% of pensioners live in Switzerland or France, it is also recommended to envisage fiscal measures such as an internal partial taxation or retrocession in favour of the Fund.

Conclusions

It is evident that the demands are shared in an equitable manner between the partners in the Fund. The recommendations presented have been keenly negotiated and it is now to be hoped that the Director General will play his part in transmitting the conclusions of the CACP to the bodies who must ratify (and finance them), and to the administrators who must put them into practice as soon as possible.

We must remember that all the above consists only of proposals, and we must remain vigilant, and also firmly support the appeal we placed before the BIT on 12 July last.

Jean-François BARTHÉLEMY, François WITTGENSTEIN

SCC Working Group on Pension Guarantees

(original French)

The working group continues its studies on the different aspects of the pension guarantees judged to be indissociable from the creation of a Foundation in case of dissolution of CERN.

The question of the withdrawal of one or several Member States during the Organization's existence and the consequences for the Pension Fund, also the guarantee that in case of dissolution, the Organization will honour its debts to the Fund, were treated in a report established by three experts in international law.

As these experts underlined, the pension rights of CERN personnel, conforming to the Rules and Regulations of the Pension Fund, form part of the social security regime of CERN and constitute by this fact a fundamental character which should benefit from special guarantees.

In fact, the principle what every employee, in addition to salary, has the right to adequate social protection from his employer, is part of the legal order of all the Member States of the Organization and of all International Organizations. At CERN, the principle is solidly established in the Rules and Regulations of the personnel and the Rules and Regulations of the Pension Fund.

At the invitation of TREF, the working group has followed its studies on the questions relative to the guarantee of pensions in case of dissolution of CERN and in the case of withdrawal of Member States, on the basis of the report of the three experts and of their conclusions.

The questions relating to the maintenance of the level of payments to be paid by the Foundation to the beneficiaries, the preservation of their purchasing power and their health insurance are still under study.

René BARTHELEMY, Edith DELUERMOZ