Wednesday, October 7, 2009



CASE # 2009-001

(S. P. Sundaram – 30 September 2009)

(Note: Sometime ago, Mr Merrill Cassell (former Budget Director of UNICEF) raised some queries questioning the validity of the common cause appeal asking for the restoration of full pension for 1/3 lump sum recipients once the lump-sum got recovered by UNJSPF with generous interest over a period of 11+ years. Our Senior citizen/UN retiree, Mr Sundaram, prepared the following note answering his queries, those of some relevance.

No one can deny the right to any individual in taking responsibility for one's life; and change the mindset from victim-hood to become a co-creator of a just and orderly society, incl. UNJSPF setup, fostering human values of caring and sharing).

Thank you for your coverage of our common cause Appeal, in your website, You have done yeoman service in highlighting the various developments in detail, to ensure UN justice does not equate to Injustice.

You have rightly quoted extensively from friend Merrill Cassell and his various assertions, based on mere conjecture and “gut feeling” rather than on hard and incontrovertible facts and figures to substantiate or case histories. Rather sad! I hope you will give me space for dissecting his misleading statements.

Firstly, I have been in some correspondence with Mr. Cassell. He made the same “judgemental statements” which I seriously countered, for which he is yet to answer me direct, point by point, except to close the discussion with “we agree to disagree”; however, he continues to indulge in “blogging”with imaginary people with the same contested (by me) assertions and pontifications! He may have been a very senior official in the UN family (a fact which he never forgets to project), but that doesn’t make him the “fountain of wisdom”. Nor does one prove a point as fact by simply repeating “it must be true because I say so” I would (as you would, no doubt, too) need actual – not manufactured -- facts and figures from Mr Cassell, especially, from a former Budget Director.

He makes a general statement that the restoration of full pension will not be “financially prudent, ethical or fair”. Come, come, Mr. Cassell, where are the facts? I daresay the facts would prove otherwise. Neither he, nor the CEO of the Pension Fund, whom I had challenged to lay bare all the facts relating to the lump sum operation have come forward except to repeat, parrot-like, the same false assertions and irrelevant sources in support.

Take the “not financially prudent” argument. Firstly, there is a document in the UNJSPF records – I have seen it – in which the Fund’s own actuaries, in one of their reviews had stated that the lump sum is fully recovered in 13 years, after which the beneficiaries may be entitled to full pension. If the document exists (and not destroyed) no one dares produce it except being in a state of total denial. If the actuarial review is correct (who will call them to give evidence and spill the beans?), what the actuaries say demolishes the argument “not financially prudent”. Yes, the actuaries who assessed the level of contributions, the level of benefits, the amount of the lump sum and the amount of deductions needed, supposedly correctly, can’t be wrong in this single instance.

Furthermore, many Governments, mainly former British colonies, have instituted some sort of lump sum scheme. India, for instance, has had the system for over 75 years (during and after British Rule) with the automatic restoration of full pension after 15 years. And mind you, India, from the British days, has had a wealth of financial wizards, ace actuaries, legal luminaries and administrative giants (of Mr. Cassell’s ilk, some of whom have since adorned the high offices in the UN and other international bodies) and what they had designed had stood the test of time and the scheme has been financially stable, viable and workable even to the present day. And mind you, India has had one of the highest increases in the life expectancy which could have upset all actuarial calculations. What better proof you need to totally discredit the spurious theory of Mr. Cassell et al? To argue that UN Pension Fund is not like other national pension schemes (like the Indian model), but is a different animal, is too frivolous to consider. Furthermore., there is the Noblemaire Principle, the guiding philosophy being that UN staff (naturally, including retirees) terms must be modelled on the best among the national civil services. If the Indian pension scheme’s terms are among the best on offer (there may be others which may even be better), UNJSPF should at least match that, viz., restore the full pension after 15 years.

As regards the “not ethical” stand of Mr. Cassell, what kind of ethics are we talking about? The ethics of the UN Pension Fund’s implementation of a policy which is nowhere sanctioned by any of the Fund’s own Rules, or which is in violation of its own “recovery of indebtedness” Rule? Or the ethics of the Fund set up for the benefit of UN Retirees, making money on the backs of some of the beneficiaries? Or the ethics of withholding of vital information on the Actuarial Tables (and actuarial recommendations) governing the commutation of pensions? Or again, the ethics of the Standing Committee of the Pension Board not calling the Appellant to be present at the hearing of the Appeal, or even considering the various points made in the Appeal, or the Committee’s decision based on their citation of Rules which have no relevance to the issue whatsoever?

So much for ethics. As far as the “fairness” issue, it may be relevant to consider that CAFICS (Canadian Association of Former International Civil Servants) set up a Committee of 7 former Senior officials to study in-depth the proposal for the restitution of full pension. One of its findings was that the lump sum option was grossly unfair and that “they would not recommend to anyone to avail of the option” That is a telling statement on the “fairness” of the scheme and its operation! Again, the unfair discrimination between the beneficiaries, the ones who took the lump sum and those (the majority) who didn’t. Some fairness, that is.

It may not be totally irrelevant to compare the pension schemes with life insurance policies, although they are operated totally differently. There are some similarities in the operation of the lump sum and the insured amount.. Both are governed by actuarial calculations of life expectancy. In the former case, the money is paid up front and recovery made in instalments (deductions), while in the latter, premium is collected towards the payment of a “lump sum” at death. It is significant that a Canadian Court ruled that continued collection of premium, in excess of the total amount insured for, is “unconscionable”. Wouldn’t therefore the continued deduction of benefit beyond the date of full recovery of the lump sum be similarly unfair?

Mr. Cassell says that “by offering ‘B’ to anyone opting for ‘A’ would be unfair to those who chose ‘B’”. ‘A” took the lump sum – not a gift, but a kind of debt – and went on re- paying it (with generous interest) in instalments through deductions. When the “debt” is fully repaid, ‘A’ and ‘B’ are on the same footing, able to enjoy their full pension. Where is the unfairness, unless it is in ‘B’’s mind, or ‘B’ doesn’t want to get down from the manger to enable ‘A’ to enjoy equal rights and benefits.

The argument that those who took the lump sum to make a killing through investments, a red herring, is not borne by facts. The majority of retirees, as everyone knows, did not, repeat not, avail of the lump sum. Were they stupid to forego the wealth from this goldmine? Obviously not, and one has to conclude that there was no incentive opportunity to invest. Also a survey done sometime ago of those who took the lump sum showed that they mostly took the lump sum to meet some pressing needs at the time of their retirement, relocation and life re-adjustment. So, once again Mr. Cassell has got all his facts wrong.

There are many other canards that Mr. Cassell and his likes have let out and all these balloons can be burst with reasonable and logical answers.

I hope Mr. Cassell will do us all a favour by also publishing, in his blog, the various arguments against his pet theories, for all to make their own judgement.

With many thanks for your forbearance,

(Sandy Sundaram)



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