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Backgrounder #378 on International Organizations

September 11, 1984

A U.N. Success Story: The World's Fattest Pensions

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(Archived document, may contain errors)

378 September 11, 1984 4 A U.N. SUCCESS STORY THE. WORLD'S FATTEST PENSlONS INTRODUCTION Though most of the U.N.'s activities are controversial there is one thing on which just about everyone agrees--the U.N is a very generous employer It pays its sprawling bureaucracy more than probably any government in the world pays its civil servants. It sends its bur e aucrats into retirement secure with the kind of pension that would be the envy of every government and private sector worker worldwide. And it says farewell to its workers with a golden handshake retirement bonus that is unknown outside of the most genero u s private corporations. If there is at least one United Nations success story, it is the breeding of the world's fattest pensions. The trouble is that this U.N generosity toward what is generally acknowledged to be an under worked, overstaffed bureaucracy is underwritten by the world's taxpayers. And no one is paying a greater share than the American As such, American taxpayers and their representatives in Congress are entitled to start asking whether they are receiving fair value from'the U.N. staff in re t urn for the high salaries and lavish pensions. Should the American taxpayer, for example be underwriting more generous salaries and pensions for United Nations bureaucrats than those received by U.S. government civil servants--or THE GENEROUS In 1982 by s killed workers at U.S. piants and offices?

UNITED NATIONS 8 the United Nations Joint Pension Fund spent $250 million on payment of benefits to 6,515 beneficiaries. Contribu tions to the Fund by member organizations totaled 231 million in 1982, of which the United States contributed. approximately 25 percent, or $58 million 378 September 11, 1984 A UmNm SUCCESS STORY THE, WORLD'S FATTEST PENSIONS INTRODUCTION Though most of the U.N s activities'are controversial, there is one thing on which just about every o ne agrees--the U.N is a very generous employer. It pays,its sprawling bureaucracy nore than.probably any government in the world pays its civil servants. It sends its bureaucrats into retirement secure with the kind of pension that would be the envy of ev e ry government and private sector worker worldwide And it says farewell to its workers .with,a golden handshake retirement bonus that is unknown outside :of the most generous p,rivate corporations at least one United Nations success story,..it is the breed i ng of the world's fattest pensions. The trouble is .that this U.N generosity toward' what is generally acknowledged to :be an under worked, overstaffed bureaucracy is underwritten by,the world's taxpayers As such American taxpayers and their representativ e s, in Congress are entitled to start asking whether they are receiving fair value from the U.N. staff in return for the high salaries and lavish pensions. Should the American taxpayer, for. example be underwriting mdre .generous salaries and pensions f.or United 1 Nations bureaucrats than those received by U.S. government civil servants--or by skilled workers at U.S. plants and offices If there is And no one is paying a greater,share than the American THE GENEROUS UNITED NATIONS In 1982 the United Nations J oint Pension Fund spent $250 million on payment of benefits to 6,515 beneficiaries. Contribu- tions to the Fund by member organizations totaled $231 million in 1982, of which the United States contributed approximately 25 percent, or $58 million 378 I Sep t ember 11, 1984 A U.N. SUCCESS STORY THE. WORLD'S FATTEST PENSIONS INTRODUCTION Though most of the U.N. Is activities 'are controversial there is one thing on which just about everyone agrees--the U.N is a very generous employer. It pays its sprawling bure a ucracy more than:probably any government in the world pays its civil servants It sends its bureaucrats into retirement secure with the kind of.pension that would be the envy of every government and private.sector worker worldwide And it says farewell to i t s workers .with:a golden handshake retirement bonus that is unknown outside .of the most generous p,rivate corporations at'least one United Nations success story,.it is the breeding of the world's fattest pensions. The trouble is .that this U.NI generosi' t y;toward what is generally acknowledged to:be an under worked, overstaffed bureaucracy is underwritten by .the taxpayers Congress are entitled to start asking whether they are receiving fair value from the U.N. staff in return for the high salaries and la v ish pensions. Should the American taxpayer for,.example be underwriting more generous salaries and pensions for United Nations bureaucrats than those received by U.S. government civil servants--or by skilled workers at U.S. plants and offices If there .is And no one.is paying a greater share than the American As such, American taxpayers and their representatives,in THE GENEROUS UNITED NATIONS In. 1982 the United Nations Joint Pension Fund spent $250 million'on payment of benefits to 6,515 beneficiaries. Co ntribu tions. to the..Fund by member organizations totaled $231 million in 1982, of which,the United States contributed approximately 25 percent, or $58"million.

American more generous taxpayers are supporting a pension plan that is to its members than tha t of the UnitedStates government An accountant, for example, working for the United States government at a GS-12 grade will earn a pension of $18,000 after 35.years of service. His counterpart in the United Nations will earn a pension of $33,000 for the s a me length of servi.ce. A United States government engineer with a GS-13.grade will earn a pension of $21,732 after 35 years of service, His equivalent in the United Nations system will earn a pension of $40,000 In the United Kingdom, a Deputy Secretary wi th 35 years of service will be entitled to a $19,250 pension counterpart, an Under-Secretary-General, will earn a $75,000 pen sion. General Motors blue collar workers, meanwhile, earn a maxi- mum $8,115 pension after 35 years of service.

U.N. with a golden handshake, a substantial cash reward for service.

For example, after 30 years of service, an Under-Secretary-General will receive a lump sum of $343,500 employed with the U.N. for 30 years and holds the P-4 rank will receive a $184,500 farewell bonus, wh ile a.P-3 rank computer specialist who has been on the payroll for 30 years will get 153,000 His United Nations In addition to their fat pensions, U.N. employees depart the An accountant who has been There are fourteen member organizations in the United N a tions pension plan: the United Nations; International Labor Organiza tion; Food and Agriculture Organization; U.N. Educational, Scien tific, and Cultural Organization; World Health Organization International Civil Aviation Organization; World Meteorologic a l Organization; Interim Commission for the International Trade Organization; International Atomic Energy Agency; International Maritime Organization; International Telecommunication Union World Intellectual Property Organization; International Fund for Ag r icultural Development and the International Center for the Study of the Preservation and the Restoration of Cultural Proper ty. The European and Mediterranean Plant Protection Organization is an inactive member agencies' budgets, it also pays 25 percent o f their contributions to the Fund Since the U.S. pays 25.percent of these Individuals in the U.N. system also may pay into the Fund. In 1982 there were 50,966 participants who contributed $115 mil lion to the Fund.

The chart following lists United Nations, United States government, United Kingdom civil service, and General Motors blue collar worker pension plans. These pension figures reflect an average case scenario There are many individual factors to be taken int o account for each person, such as amount of accrued leave, actual salary (figures here have been selected from a salary range) and any other extenuating circumstances. The chart thus cites examples only and not actual pensions 3 PENSION COMPARISONS 35 Yea r s of Service yearly amounts UNITED NATIONS PENSIONS U,.S. Equiv. Grade Salary Pension GS- 18 GS-18 GS- 16 GS-15 GS-14 GS-13 GS-12 GS-10 GS-7 Under-Secretary-General $97,00d As st Secretary-Gene ra 1 86,000 D-2 67,000 D- 1 56,000 P-5 49,000 P-4 38,000 P-3 30,000 P-2 24,000 P- 1 18,000 75 000 57,000 52,000 47,000 40,000 33,000 25,000 19,500 66,000 The D designated posts are managerial, while the P posts are technical experts.

UNITED STATES GOVERNMENT PENSIONS Grade Sa la ry Pension GS- 18 GS-17 GS- 16 GS-15 GS-14 GS-13 GS-12 GS-11 GS- 10 GS-9 GS-7 81,000 69,000 59,000 50,000 43,000 36,000 30,000 25,000 23,000 21,000 19,000 53,662 45,712 39,087 30,084 25,908 21,732 18,156 15,180 13,980 12,792 11,604 Formula for computing U.S. government pensioni 1% percent of the highest salary over past three years times years of service up to 5, plus 1% percent of the highest salary over past three years times years of service over five and under 10. If over 10 years of service, add 2 percent of the highest salary held for t h e past 3 years times years of service over ten. 4 UNITED KINGDOM CIVIL SERVICE PENSIONS U.N. Equiv. Grade Salare Pension Under Sec. General Deputy Secretary $44,000 P-5 Principal 20,000 Asst. Sec. General Under Secretary 36,500 D-2 D-1 Assistant Secretary 28,000 P-4,P-3 Senior Executive Officer 15,000 P-2,P-1 Assistant Principal 9,500 19,250 15,960 12,250 8,750 6,563 4,160 Formula for computing U.K. civil service pension past three years times length of service 60, 45/80 at age 65 Based on 1 E U.S 1.36 1/8 0 of best salary over Subject to maximum of 40/80 at age GENERAL MOTORS BLUE COLLAR WORKERS PENSIONS Grade hour D" code C code B" code A" code 10.71 and over 9.88 10.70 9.67 9.87 9.65. and less Pension 8,115 8,010 7,905 7,800 Formula for computing GM pensi o n which is multiplied by years of service (over 30 reimbursement to each person's pension the A-D codes correspond to a dollar figure Add a $13/month Medicare CONCLUSION To be sure, it difficult to compare one pension system with another. But,the United N a tions figures are so much higher than any others that it is inconceivable that any other public service is as well rewarded as working for the United Nations. The irony is that, according to most reports, few public services are as inefficient and .wastef u l as the United Nations sion system as an area in which to cut back United States contri butions to the U.N. The U.S. taxpayer should not have to subsidize U.N. civil servant pensions far in excess of those of U.S. govern ment civil servants. The Congress should consider limiting U.S contributions to the U.N. pension fund to a level that would provide U.N. pensions no more generous than those received by U.S. civil servants The United States Congress should investigate the U.N. pen Melanie L. Merkle Resear ch Assistant 1

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