United Nations Joint Staff Pension Fund. UNJSPF Strategic Framework for the period

Transcription

1 UNJSPF Strategic Framework for the period

2 Table of Contents I. Introduction 3 Page II. Overall Orientation of the Fund A. Mission B. Longer-term objectives III. Priorities for IV. Biennial objectives and programme plan by functional area 10 A. Fund Secretariat 10 Component 1: Executive direction and management Component 2: Programme of work Operations Financial Services Component 3: Programme support 15 Information Management Systems Service 15 Legal Office 16 Executive Office 18 B. Investment Management Division 20 Component 1: Executive direction and management 20 Component 2: Programme of work Investment section Risk and compliance Operations Component 3: Programme support Information Systems Section Annex: Key strategic studies/processes Page 2

3 UNJSPF Strategic Framework for the period I. Introduction 1. As requested by the Pension Board, this Strategic Framework has been prepared following the approach and format used in the United Nations strategic planning and budgeting processes. However, it should be noted that the United Nations Joint Staff Pension Fund ( UNJSPF or the Fund ) is an inter-agency body established by the United Nations General Assembly to provide retirement, death, disability and related benefits for international civil servants employed by the United Nations and the other international organizations admitted to membership in the Fund. Therefore, the format used by the Fund, which reflects the Fund s nature and unique characteristics, will vary somewhat from that used by the United Nations. 2. The Strategic Framework identifies the main priorities and objectives of the Fund for the biennium , and serves as the basis for programme planning, budgeting, monitoring and evaluation. The Framework represents a compact between the Fund s Management and the Pension Board outlining the main objectives for the Fund in the period as well as the corresponding strategies to achieve them. It provides insight into Management s actions with the aim of facilitating the overall monitoring of results and performance assessment of the Fund. It establishes the basis for a concrete and on-going relationship between the Pension Board and Management, thus constituting an important and integral part of the Fund s governance mechanism. 3. The builds on the findings and recommendations of various assessments and reports that have been submitted for the consideration of the Board at its past sessions. These include the Strategic Framework for , the strategic planning exercise conducted in 2007, the Third Management Charter 2, the comprehensive risk assessment studies undertaken in and , the overall review of the UNJSPF staffing and organizational structure ( Whole Office Review ) considered in , the Medium-Term Human Resources Action Plan ( ) 6, the Asset-Liability Management Studies conducted in and and the Current State Assessment and Target Operating Model studies 9 undertaken in preparation for the implementation of the Integrated Pension Administration System (IPAS). The Strategic Framework was approved by the Pension Board at its 59 th session in July JSPB/58/R.20 2 JSPB/55/R.26 3 JSPB/53/R.46 4 JSPB/57/R.23 5 JSPB/55/R.23 6 JSPB/57/R.21 and JSPB/57/R.22 7 JSPB/54/R.20 8 JSPB/58/R.8 9 JSPB/55/R.22 Page 3

4 II. Overall Orientation of the Fund A. Mission 4. Under the authority of the Pension Board, the Fund is entrusted to provide retirement, death, disability and other benefits and related services to its participants, retirees and beneficiaries To meet its long-term commitments, the Fund must ensure an adequate level of investment return on its assets while mindful of the approved risk tolerance philosophy and the requirements posed by its liabilities. It must also ensure that all of its activities reflect the best conditions of security, accountability, social responsibility and sustainable development while operating in full compliance with the highest standards of quality, efficiency, competence, and integrity. 6. The Strategic Framework reaffirms a strong commitment to a service-oriented Pension Fund. Pensions are a critical element of the overall conditions of service for all staff of the 23 member organizations. They are an integral part of the package of pay and benefits that determines the competitiveness and attractiveness of the organizations as employers in the labour market. Taken together, they must adapt to a changing environment in order to continuously attract, retain and reward staff based on merit, skills, competence and performance. B. Longer-term objectives 7. As already mentioned, considering the outcome of the key studies carried out over the past six years, the following long-term challenges and objectives for the Fund have been identified by management and approved by the Pension Board 11 : i. Strengthening the Fund s operating model; ii. Improving the management of risks and internal controls; iii. Enhancing information systems; iv. Increasing the quality and efficiency of the services provided, including communication and outreach efforts; and v. Promoting social and environmental responsibility. 10 The legislative mandate of the Fund is derived from the General Assembly resolution 248 (III) in 1948 that approved the UNJSPF Regulations, as well as subsequent General Assembly resolutions and the Pension Board decisions. The General Assembly resolution also determined that the investment of the assets of the Fund will be decided by the Secretary-General. 11 Please see the Third Management Charter (JSPB/55/R.26). Page 4

5 Strengthening the Fund s operating model 8. The Fund s operations must regularly deal with a complex set of regulations, given that most of the amendments to the benefit provisions have evolved gradually and in a piecemeal fashion aimed at providing additional advantages to its participants, and are often linked to past decisions taken either as economy measures or in response to growing social demands in favour of new categories of beneficiaries. The Fund must also continue to adapt its processes and procedures to a changing accounting, banking and regulatory environment. Furthermore, ongoing growth in the transactional volume related to active participants serviced by the Fund, combined with increasing numbers of individuals reaching retirement age and further increases in life expectancy, continue to translate into heavier workloads for the Fund. In response, the Fund will focus on optimizing its operational model, moving to a pension administration system that will integrate and standardize its processes in order to enhance efficiency and consistency of its operations. Specifically, the Fund will aim to minimize complexity in the overall operational procedures, in the overall plan design and in the Regulations, Rules and Pension Adjustment System of the Fund, as well as implementing the Integrated Pension Administration System (IPAS) to replace the Fund s aging system environment. The Fund will also strengthen monitoring and improvement of its operational performance and continue to promote an effective results-based culture. 9. In May 2006, the General Assembly approved the adoption of the International Public Sector Accounting Standards (IPSAS), as part of a UN system-wide initiative. The Fund s current accounting practice follows that of the United Nations. As decided by the Board at its 57 th session in 2010, the Fund has adopted IPSAS/IAS accounting standards with an implementation plan starting in Beyond the impact on accounting and financial reporting, the conversion to IPSAS will bring about changes in organizational business processes, investment management and general financial management within the Fund. The implementation of IPSAS is expected to lead to improved internal control and better governance of the Fund as well as better planning, management and decision making and enhanced transparency through revised Financial Statements. 10. The Fund must continue to enhance its investment capacity in particular at the human resources and systems infrastructure levels, as is required to effectively manage a portfolio of approximately US$40 billion (at the end of 2011) and to respond to market conditions which continue to be turbulent. The Fund will aim to minimize investment risks through increased investment diversification and management of asset allocation. The improved information technology capacity will provide more effective, flexible and secure investment and trading platform to better cope with market challenges. With an enhanced risk management system to monitor and manage investment risk, the Fund will in a better position to determine appropriate risk budgets. The Fund will also rely on an IPSAS compliant accounting system, an operations system enabling exception based investment transaction processing and real time reporting, a reconciliation system and an investment data hub providing accurate and real time market data. 11. The Fund must also continue to adapt its processes and procedures to a dynamic investment and business environment. The Fund adopted fund and manager selection procedures that will provide a more expeditious, transparent and efficient process for acquiring investment instruments which will improve the Fund s ability to better seek Page 5

6 and compete for investment opportunities as they arise. Improving the management of risks and internal controls 12. One of the findings of the asset-liability management (ALM) studies, considered by the Pension Board in 2007 and 2011, was that there is a complicated interaction between the Fund s assets and liabilities which requires an integrated approach, especially when dealing with solvency matters and with the determination of the strategic asset allocation for the Fund s investments. Unique features, such as the two-track feature of the Pension Adjustment System, add complexity to the Fund s long-term financial management. The Fund will enhance its control objectives, implementing an effective enterprise risk management process, and carrying out periodic asset-liability management studies, in order to be able to make informed decisions regarding plan design and investment policy. To that effect, the Fund will provide and maintain the framework for a well-funded and actuarially sound Pension Fund, balancing the increasing interdependency of the Fund s assets and liabilities. The Fund will also generate optimal investment performance that over a longer period of time outperforms the benchmarks and secures the required positive real rate of return within acceptable risk. In order to continue monitoring the Fund s solvency and interaction of assets and liabilities, the next asset-liability management study will be prepared and submitted to the Board in The Fund will also align its enterprise risk management policy with the strategic priorities and complement this policy document with a comprehensive risk management methodology, specifying the responsibilities, steps and tools to be applied in the risk management process. Enhancing information systems 13. As benefit provisions and payments are adjusted to reflect economic and demographic changes, the increased demand for up-to-date information needs to be met. Thus, the Fund will focus on updating and upgrading its information systems infrastructure, improving its overall operational processes, system capabilities and performance, and automating data exchanges with member organizations as much as possible. The Fund will enhance information sharing with Member Organizations, expanding dedicated interfaces, and ensure that the UNJSPF s information technology infrastructure keeps pace with the changing requirements of business users while taking advantage of advanced technologies to support improvements in security, performance, and quality of service. 14. As the diversification of the Fund increases and the market conditions change rapidly, the Fund must be equipped to act in a timely manner to protect the assets of the Fund. In this regard, the Fund will focus on improving its information systems capacity, improving its investment operations introducing straight-through and exception based processing, and enabling direct market access, basket trading and portfolio rebalancing and investment risk management. Moreover, the system will enhance internal control, security and accountability. 15. The Fund is also moving towards straight-through and exception processing with the least manual intervention with proper internal controls and audit trail. The Fund will continue to enhance its information technology capacity in order to keep pace with Page 6

7 industry-standard processes and focus on daily reconciliation of accounts to replace the current monthly and manual processes. Increasing the quality and efficiency of the services provided including communication and outreach efforts 16. Paying pensions and related benefits as per the Fund s Regulations and Rules to an increasing variety of retirees and beneficiaries in more than 190 countries in some 15 currencies requires a sophisticated operating model covering legal, operational, administrative, financial and technological aspects, and a modern and efficient Information Technology infrastructure. This will require the Fund to strengthen the management of participation record keeping and contribution collection together with improving benefit entitlement calculation and payment processing. The Fund will continue to ensure that all pension entitlements are estimated, calculated and eventually paid consistently and in full conformity with the Fund s Regulations and Rules and incorporate quality performance standards into its work plans. Furthermore, the Fund has to continue to reassure its constituents of its sustainable long-term actuarial position for retirement income security. The Fund will strengthen and enhance an ongoing, comprehensive communication policy with all constituents of the Fund to ensure full transparency and that participants and beneficiaries are in a position to make fully informed decisions and choices regarding their participation and benefit election. Promoting social and environmental responsibility 17. The Fund must assure its partners and constituent groups, including participants and former participants and other beneficiaries, as well as governance/legislative bodies, that their concerns on social and environmental issues are properly addressed. In particular, the Fund must ensure it does not shift the burden of under-funded liabilities and commitments onto future generations, and preserves an equitable distribution of costs and benefits among generations. Additionally, the Fund will protect the environment, follow sustainable development principles and values and be a socially responsible investor subject to compliance with the four criteria adopted by the General Assembly. III. Priorities for As a result on a consultative process, and in line with the Fund s mission and the long-term objectives discussed above, the following priorities have been identified for the biennium: i. Pension Fund Secretariat Integrated Pension Administration System (IPAS); ii. IMD Business Application Software; iii. Focus on client services; iv. Risk management; v. Knowledge management and training. Page 7

8 Pension Fund Secretariat Integrated Pension Administration System (IPAS) 19. The Integrated Pension Administration System (IPAS) will encompass the adoption of new process-driven working practices, the modernization of the information technology platform and the introduction, where required, of new systems. IPAS will replace the Fund s ageing systems environment, lead to a significantly more efficient use of resources and provide increased capacity in accordance with the target operating model presented to the Pension Board at its 55 th session in This initiative will also lead to the development of enterprise-wide IT systems, which support a horizontal approach to transaction management, breaking down established silos, in favour of an end-to-end process-driven operational paradigm. The project can therefore be considered an investment in the future operational set-up and control environment of the Fund that, in the longer run, will achieve increased capacity in operations and significant improvements in service levels. IMD Business Application Software 20. The IMD Business Application Software will introduce investment operations best practices and implement new investment processes such as exception based and straight through processing. This software is being built by integrating several best-ofbreed, off the shelf, market systems. The systems include a risk management, trade order management, secure communication, operations, accounting, reconciliation and market data. It will enable a front to back processing of investment transactions, a wide range of real time reporting and real time access to accurate market data. More importantly, it will provide modern investment tools enabling the portfolio managers to make the right investment decision at the right time to safeguard investments. This will also support the dual custodians and independent market record keeper structure. Focus on client services 21. As more and more active participants begin to retire, and those who retire live longer, the need for client services will continue to grow. The aging of the Fund s retirees will call for greater attention to specific needs that only a state of the art client servicing operation would be able to provide, especially given the increasing complexity of the Fund s benefit provisions. In particular, the number of the two-track cases has significantly increased over the last ten years, which call for more frequent and more extensive consultations and communications. Moreover, with the aging of the clientele and a wider geographical dispersion of the retirees and other beneficiaries now opting for the two-track feature, such efforts are consuming more and more time and resources from the existing client servicing staff. In addition, there is now a greater need for specialization in client servicing staff, as well as increased demand on legal service, as a result of the Fund s ongoing efforts to provide benefits to address a wider scope of individuals and more unique circumstances. All these issues, combined with the implementation of IPAS and the adoption of the process driven approach call for the strengthening of the client servicing capabilities of the Fund. Page 8

9 Risk management 22. The Fund faces a variety of risks which need to be addressed and managed; among the most critical is the potential failure to meet the pension promise. The Whole Office Review conducted in 2008 identified risk management as a missing function and recommended the establishment of a technical evaluation and risk management team. While progress has been made, the function remains understaffed. A fully operational technical evaluation and risk management team will allow the Fund to better address the risks identified during periodic risk assessments. The risk management function will update regularly the Fund s risk map to reflect changes in the environment, both internal and external, as well as changes in management s perception of risk and risk appetite. The secretariat will use the risk management information to define appropriate strategies for the management of the risks identified. The results of the risk management process will also provide inputs for a risk-based internal audit plan to align it with the organization s risk profile and ensure that the timing of the internal audit of risks is right and that the results of such efforts will be best used to strategize and plan for the future. The in-house technical expertise will complement the actuarial valuation, actuarial costing exercises and the ALM study and will greatly assist decision makers to better understand the impact of plan design changes (e.g. changes to benefit scope or structure, adjustments to the two-track feature, etc.) on the operational platform, the plan s long-term solvency and on the volatility of financial results. Knowledge management and training 23. In the next few years the Fund will have lost a number of key staff with intricate understandings of the unique internal policies and procedures that have been developed over many years by the Fund. This could result in the risk of loss of essential information, knowledge, expertise and institutional memory. Continued enhancement and regular maintenance of the knowledge management systems will provide for better sharing, retention and more standard and efficient use of information, experience and knowledge. At the same time, further development of the Fund s training platform including e-learning can shorten the learning curve for all staff. Succession planning and knowledge transfer will be achieved through training and emphasis on middle management development. Page 9

10 IV. Biennial objectives and programme plan by functional area 24. As requested by the Pension Board, the biennial programme plan outlines the main objectives and the corresponding strategies identified by Management for the period under consideration. These objectives and strategies are based on the priorities described above and provide the basis for planning of outputs and activities, budgeting, and allocation of the required resources for the next biennium. A. Fund Secretariat Component 1: Executive direction and management Objective of the Organization: Ensure efficient administration of the Fund and full implementation of the Fund s programme of work in compliance with the Regulations and Rules of the Fund and with decisions and guidelines issued by the Pension Board and the General Assembly. Expected accomplishments (1) Effective management of the Fund s programme of work Indicators of achievement (1.1) 100% of the Board and General Assembly decisions and mandates implemented by deadline (1.2) Full compliance with the Fund s policies and procedures (2) Effective substantive, technical and procedural support to the Pension Board, Committees and Working Groups (3) Effective management of Fundwide governance mechanisms for Human Resources, Risk Management, Business Continuity/Recovery, IT, IPSAS, Asset-Liability Management (4) Effective management of risks and improved internal control (2.1) No negative feedback from the Pension Board, Standing Committee, UNSPC, Committee of Actuaries, Audit Committee and Working Groups about support provided (3.1) Quarterly meetings held and all decisions implemented by deadline (4.1) Increased comprehensiveness of risk map and increased percentage of risk treatment plans implemented by agreed deadline (4.2) 100% of critical audit recommendations implemented by agreed date of implementation (5) Improved communication with the Fund s supervisory bodies and diverse constituent base Page 10 (5.1) Information on the Fund s key activities, operational statistics, actuarial and investment performance shared with

11 supervisory bodies on a regular basis (5.2) Increased number of website visits Strategy: 25. The Office of the CEO will continue to ensure full implementation of the Fund s work programme through overall policy-setting, direction, supervision and management of the Fund. The Office provides the focus and required coordination to ensure that the Fund is continually in a position to provide services and pay benefits to its active participants, retirees and beneficiaries working and living worldwide. Moreover, the Office of the CEO will continue to organize and service the meetings of the Pension Board, the Standing Committee, the UNSPC, the Committee of Actuaries, the joint sessions between the Investment Committee and the Committee of Actuaries, and the Audit Committee. Thus, the Office must ensure that it remains in a position to provide each level of the Fund s governance with clear, accurate and up-to-date information on managerial, financial and technical issues. 26. With the shift in the operational paradigm from a case-driven to a processdriven approach, the Office will continue to lead the Fund s several important modernization initiatives (e.g. IPAS, Business Continuity, Risk Management, etc.). In particular, moving to an integrated pension administration system ( IPAS ) will be the Fund s most important undertaking in the period covered by this Strategic Framework. This initiative will require redeploying Professional and General Service staff from different areas of the Fund to participate on the project team. Accordingly, the Fund will aim to avoid significant changes in the plan design and in the Regulations and Rules of the Fund during the transition to the integrated pension administration system, the new information systems and technologies, and the business operating model. With the envisaged go-live of the IPAS system in 2014, the Office will focus on deploying the solution to its full potential enabling end-to-end processing and cross-functional reporting. 27. The Office will place strong emphasis on strengthening the capacity for policy analysis and developing a broader performance management framework. An effective results-based culture will be promoted by ensuring that all line supervisors share Management s expectations and goals. The Office will regularly monitor and improve, as required, operational performance in the Fund s New York and Geneva offices, measuring performance against specific and appropriate indicators. In particular, tailored performance metrics will continue to be developed to support the measurement and monitoring of the effectiveness and efficiency of the Fund in its different operational, investment and support processes. Additional enhancements and regular maintenance of the Fund s Knowledge Management System will provide for better sharing, retention and more standard and efficient use of information, experience and knowledge. 28. The Fund will strengthen its capacity for technical evaluation and risk management, and develop effective/efficient technical solutions to plan design issues and other technical matters. The adoption of enhanced risk management methods and tools will allow the Fund to effectively identify changes in the risk profile and to develop Page 11

12 measures and address the risks identified. United Nations Joint Staff Pension Fund Component 2: Programme of work Operations Objective of the Organization: Ensure that all eligible participants, retirees and other beneficiaries are serviced in accordance with the Regulations, Rules and Pension Adjustment System of the Fund, while fully adhering to the communications, quality management and internal control policies as outlined in the Fund s management charter. Expected accomplishments (1) Effective processing of Pension Fund benefit entitlements (2) Enhanced quality of clientoriented services to the Pension Fund clientele (3) Improved communication with stakeholders Indicators of achievement (1.1) Increased percentage of withdrawal settlements, retirement benefits and other benefits processed within 15 business days (2.1) Increased percentage of incoming correspondence through mail and responded to within 15 business days (3.1) Increased number of briefings and seminars for participants, beneficiaries, staff pension committees and counterparts in Finance and Human Resources staff of participating organizations Strategy: 29. Following an unprecedented increase in the total number of clients served over the last 10 years, the Fund is now serving over 185,000 individuals working and residing in some 190 countries worldwide. The continuous increase in the number of participants, retirees and other beneficiaries has resulted in an ongoing increase in workloads, concomitant growth in complexities and a growing number of cases being processed and clients requiring service. Operations will continue to ensure that all pension entitlements are estimated, calculated and paid consistently, in a timely manner and in full conformity with the Regulations, Rules and Pension Adjustment System. Quality performance standards will continue to be incorporated into the work plans of the units. Operations will also periodically update its risk register and monitor the efficiency and effectiveness of defined risk mitigation measures for the risks under its responsibility. 30. It is important for the Fund to recognize its inherent complexity and to optimize its operational model accordingly. Operations will continue to seek ways to further integrate and standardize its processes in order to ensure efficiency and consistency in the management of its work. As part of these efforts, Operations will aim to minimize the overall operational complexity of the existing delivery of its services by mitigating the significant number of hand-offs, interfaces and the number of different and various applications utilized in its operations. Page 12

13 31. The Fund intends to increase its focus on the growing demands in its client servicing area; hence Operations should be appropriately structured and more strategically aligned to address its growing needs well into the future. The successful implementation of IPAS and the expected transfer of some pension benefit processing staff to the Client Services Section would result in better integration and standardization of processes and thus in further efficiency gains. Modernization of working practices by implementation of the IPAS will assist the Fund s move from a case-driven to a processdriven modus operandi. This major project will enable a more efficient use of staff, while also reducing the current linear correlation in the number of operations staff required to the number of participants and beneficiaries. Such staff, however, will be required to have a broader understanding of the overall processes involved, including systems that would be more flexible while respecting the need to maintain adequate internal controls. 32. The responsibilities in the Client Servicing component of the Fund therefore will not only continue growing, but more importantly they are expected to accelerate. More specifically, the increasing population of active staff will begin moving in greater numbers to their retirement years, while those already in their retirement years will continue to live longer, as evident by the well documented ongoing improvements in longevity. In addition to the overall growth in clientele, the Fund will also need to make better efforts to address the special and additional client servicing needs for the higher number of retirees and other beneficiaries who will be reaching more advanced ages. The growing numbers as well as the aging of the Fund s retirees will call for greater care and attention to unique needs that only a state of the art client servicing section would be able to provide. It is incumbent upon the Fund to be prepared for what is certain to occur. Operations must therefore continue strengthening its client servicing capabilities, including its overall work flows and document management and distribution functions. 33. Linked to the above is the need for improved training of staff in the specialized fields. Therefore, special emphasis is placed upon the need to retain qualified staff and to pass on their knowledge to others, with the aim of leveraging existing resources. The further strengthening of the Operational Review and Development Unit (ORADU), within the benefits processing component of the Fund will provide a permanent in-house training platform, which would not only reduce the long learning curve for new incoming staff, but also be responsible for coordination of training between the Fund s two offices and among the 23 member organizations, for documenting all procedures and processes and for resolving the most urgent and complex cases. 34. There is also a need to inform participants and beneficiaries regarding the entitlements and benefits accruing from participation within the Fund. They need to be sufficiently well informed to help relieve pressure on Fund staff by taking a proactive role, knowing what to look for, where to research and verify information regarding their participation and, where necessary, how to request remedial action. To enable such an approach, the Fund will need to continue to provide information via briefings to participants and beneficiaries and also to Human Resources and Finance professionals concerned with pension fund matters in all member organizations, including the SPC Secretariat staff. 35. The Fund must aim to maintain an understanding of its clients needs on an Page 13

14 ongoing basis, while providing easy access to all. The Fund will be able to anticipate questions and publish user-friendly information bulletins on topical issues when the need arises. Recognition should be made of the needs of the various constituent groups associated with the Fund, and increased efforts will be made to reach each group by the most convenient means possible, i.e. in-person, through the website, intranet, seminars, workshops, counselling, mail, , or telephone. Financial Services Objective of the Organization: Ensure timely, accurate and secure payment of benefits and full accountability for all financial, accounting, and disbursement operations of the Fund. Expected accomplishments (1) Effective management of benefit payments Indicators of achievement (1.1) Timely, accurate and secure payment of Pension Fund periodic benefit payments (1.2) Timely, accurate and secure payment of Pension Fund non-periodic benefit payments (2) Enhanced accuracy and consistency of contribution recording (2.1) Increase in the number of resolved participant reconciliation exceptions (2.2) All participant records verified within six weeks of receipt of year-end schedule (3) Enhanced transparency of financial reporting, improved information for internal control and governance purposes (3.1) Timely provision of financial statements (draft statement issued by 15 April of the following year) (3.2) Unqualified audit opinion by Board of Auditors on financial statements prepared under IPSAS (3.3) Absence of significant adverse audit findings on financial services Strategy: 36. Following the recommendation of the 2008 Whole Office Review regarding segregation of the Operations and Financial Services which was supported by the Pension Board during its 55 th and 56 th sessions, financial activities are now managed independently from pension entitlement activities and report directly to the Chief Executive Officer. This is a significant and strategic first step, as it recognizes the need Page 14

15 for a sharper focus on two of the most essential areas of the Fund. 37. Financial Services will focus on transition to new accounting standards through the implementation of internationally accepted financial reporting framework. In order to meet an increasing volume and complexity of work, Financial Services will continuously strive to strengthen the Accounts, Payments and Cashiers Units. Continuous interaction with the United Nations will remain important in the area of recording and reporting on the administrative expenses of the Fund. Financial Services will continue to consolidate and present financial reports to the Pension Board to assist in its decision-making process and in monitoring the performance of the organization. 38. In order to improve the internal control over financial reporting which has been identified by the OIOS risk assessment team as high impact risk and rated as a high priority area because of the weak level of preparedness, the Fund will continue to strengthen the Accounts Section to ensure that adequate controls are in place. The International Public Sector Accounting Standards ( IPSAS ) have been adopted as the accounting standards of the Fund starting 1 January 2012, further strengthening the Fund s financial reporting processes and enhancing transparency. Financial Services will also periodically update its risk register and monitor the efficiency and effectiveness of defined risk mitigation measures for the risks under its responsibility. 39. A further step in strengthening the financial function was implemented with the recruitment of the Chief Financial Officer (CFO) of the Fund. The CFO will be responsible for formulating financial policy and reviewing budgetary, financial and accounting operations of the Fund and for ensuring that an adequate financial control environment of the UNJSPF is in place to protect the Fund s resources. The CFO will certify the Fund s financial statements and budget, and lead the implementation of IPSAS by the Fund. Component 3: Programme support Information Management Systems Service Objective of the Organization: Facilitate the achievement of the operational and strategic goals of the Fund through the efficient and effective use of information and communications technology. Expected accomplishments (1) Improved information technology services Indicators of achievement (1.1) Percentage of information technology systems at satisfactory level (or above) of support (2) Increased Information Security (2.1) Percentage increase in compliance, for the defined deliverables as per the International Standardization Organization (ISO) security standards Page 15

16 (3) Improved sharing of electronic information with member organizations, participants, beneficiaries and other clients (3.1) Percentage of participants human resources information electronically delivered. (3.2) Percentage of participants financial information delivered electronically Strategy: 40. The IMSS must move to a modernized technology environment, supported by integrated systems. As part of the IPAS project, efforts will be made to realize improvements in overall operational processes, system capabilities and performance. This will entail a major shift from the current legacy environment requiring the replacement of aging components of the Fund s information system-platform. Processes will be integrated and driven by an individual client contribution and entitlement records database. Up-to-date and more complete account information in respect to the over 185,000 individuals serviced by the Fund must be made more readily accessible to the operational staff. Self-service opportunities through the web will be made available to participants and beneficiaries as well. 41. Data exchanges with the member organizations of the Fund will be automated as much as possible, including implementing (as part of IPAS) a central client contribution and entitlement records database. In order to provide for greater consistency and standardization, the Fund will build and maintain such a database. New information technologies are also offering significant opportunities for information sharing. IMSS will ensure that state of the art technologies are used to communicate with its over 185,000 participants, retirees and beneficiaries living and working worldwide. 42. The IT infrastructure necessary to support IPAS, IMD, and member organization interfaces will be strengthened and expanded in partnership with the International Computing Center (ICC). The IT legacy system environment will be downsized and eventually replaced by a shared enterprise-based infrastructure that will support the Fund for many years. 43. The IMSS will periodically update its risk register and monitor the efficiency and effectiveness of defined risk mitigation measures for the risks under its responsibility. Legal Office Objective of the Organization: To protect the legal interests of the Fund and to facilitate consistent and uniform interpretation and application of the UNJSPF Regulations, Rules and Pension Adjustment System. Expected accomplishments (1) Improved uniformity and consistency in the application of the UNJSPF Regulations, Rules and Indicators of achievement (1.1) Percentage of requests for review and appeals where the Fund s position has been upheld either by the Standing Page 16

17 Pension Adjustment System through enhanced quality of legal advice given to the CEO and other senior management of the Fund, as well as the Pension Board and the Standing Committee (2) Modernized and improved communication and knowledge sharing in respect of legal matters Committee or the Appeals Tribunal (2.1) Percentage of legal decisions and jurisprudence documented and disseminated using the UNJSPF Case Digest and other knowledge management tools Strategy: 44. Legal services and support are provided by the Legal Office to all sections and offices in the Secretariat of the Fund, the Pension Board and the Standing Committee, the UNSPC, and to participants and retirees and/or their legal representatives in regard to the application of the Fund s Regulations and Rules in individual cases. In addition to the provision of legal services to Operations and Financial Services Section, legal services and advice will also continue to be provided in connection with continued interest in the membership of the Fund, requested transfer agreements, proposed changes in the plan design and other decisions, mandates and guidelines from the Pension Board and the General Assembly. These activities include such Fund-wide initiatives as IPAS, BC/DR, Human Resources policy and planning as well as risk management. 45. Increased demand for legal review and support calls for a new approach to document and share legal precedents, rulings and policy decisions concerning pension matters in a way which would allow the UNJSPF managers and staff to familiarize themselves with legal issues, take into account legal risks in their daily decision-making and enhance the use of best practices. A strategy is to raise awareness of the whole range of legal services offered by the Legal Office among the Fund staff, as well as the Fund s partners and stakeholders, and promote knowledge sharing and thereby facilitate consistent and more efficient use of legal information and professional experience accumulated by the Legal Office. 46. The Legal Office aims at improving its research capacity, achieving significant progress in documenting and disseminating legal information and jurisprudence, training some key operational staff dealing with pension matters with legal implications, and ultimately achieving further efficiency gains through such knowledge management and development and purchase of legal research tools. 47. The Legal Office will also periodically update its risk register and monitor the efficiency and effectiveness of defined risk mitigation measures for the risks under its responsibility. Page 17

18 Executive Office Objective of the Organization: Facilitate the achievement of the operational and strategic goals of the Fund through efficient and effective administrative and programme support. Expected accomplishments (1) Timely recruitment and placement of best qualified candidates Indicators of achievement (1.1) Reduction in the average number of working days a post remains vacant (1.2) Increased percentage of women at the Professional level and above for appointments of one year or more (2) Improved skills and competencies of staff by internal and external training (3) Improved management and monitoring of the Fund s administrative budget (4) Enhanced quality and timeliness of facilities and property services (2.1) Increased production of bespoke learning courses available (2.2) Increased staff participating in and successful completion of learning and career development programmes (3.1) Reduce unliquidated obligations and cancellation of prior-period obligations as a percentage of final appropriations (4.1) Decreased working days lost due to down-time of building facilities Strategy: 48. The Executive Office provides administrative and programme support to the Fund s secretariat and Investment Management Division, as well as providing administrative and travel support to the Pension Board, the Audit Committee, the UNSPC, the Committee of Actuaries, Investments Committee and working groups. In response to the increasing volume and complexity of its work, the Executive Office will continue to strengthen the staffing level in its core functions (human resources management and staff development; budget control, financial management and reporting; and, general administration, facilities management, support services to the governance bodies and travel support). 49. The Executive Office will play a key role in the implementation of the mediumterm human resources strategic plan of the Fund through the establishment of a proactive recruitment system and the adoption of an integrated approach to workforce planning, mobility and career development. The Office will continue to encourage UNJSPF staff to develop skills and competencies to meet the challenges of the changing business model. Succession planning and knowledge transfer will remain among the major challenges due to mobility and retirement in the Fund and can be successfully achieved through training, particularly using the Fund-wide Learning Platform, and emphasis on middle level Page 18

19 management development. United Nations Joint Staff Pension Fund 50. Continuous interaction with the United Nations will remain important in the area of recording and reporting administrative expenses of the Fund. While the CFO is responsible for reviewing budgetary, financial and accounting operations of the Fund, the Executive Office will retain responsibility for budget implementation, cost control, financial management of the administrative budget and reporting in compliance with the UN Regulations and Rules. 51. Creation of internal control mechanisms and the use of metrics such as exit interviews and employee surveys will help the Office to ensure the provision of satisfactory support services to all clients in administrative matters and travel. The Executive Office will also periodically update its risk register and monitor the efficiency and effectiveness of defined risk mitigation measures for the risks under its responsibility. Page 19

20 B. Investment Management Division United Nations Joint Staff Pension Fund Component 1: Executive direction and management Objective of the Organization: Facilitate the achievement of the Fund s investment goals through strategic guidance and policy setting. Expected accomplishments Indicators of achievement (1) Sound guidelines on asset allocation ranges, strategic and tactical allocations and other investment strategies; risk management policies; operational framework and information systems infrastructure. (1.1) Outperformance of Fund s investments vis-a-vis benchmark. (2) Consistent legal advice provided on various types of investments and contracts. (2.1) Percentage of negotiated transactions that have been formally approved. (3) Enhanced substantive and technical support to the work of the Investments Committee. (3.1) 10 efficiently managed and well run meetings with no negative feedback from IC members and other participants. Strategy: 52. The Director of the Investment Management Division (IMD) sets forth the framework under which IMD s Sections establish their strategies and priorities to ensure that IMD carries out its mandate while affirming the best conditions of security, performance, responsibility and accountability and ensuring full compliance with the highest standards of efficiency, competence and integrity. The Director promotes a controlled, efficient and effective management of the assets of the Fund through a work plan designed to reflect the long-term goals/priorities of the IMD and the Fund as a whole. The Director leads IMD s coordination with the Investments Committee and cooperation with the Fund s Audit Committee, Board of Auditors and Office of Internal Oversight Services. 53. Management of the Division will ensure that all investment decisions adhere to the four criteria set by the General Assembly of safety, profitability, liquidity and convertibility. Without prejudice to the four criteria, IMD makes every effort to find suitable investment opportunities in emerging markets. 54. Asset-liability management studies will be carried out periodically in order to be able to make more informed decisions regarding plan design and investment policy. The management will closely review and implement ALM study recommendations to ensure financial health and solvency of the Fund. IMD will continue to subscribe to benchmarking studies such as undertaken in The valuable data gathered through Page 20

21 these studies will facilitate further analyses and comprehensive comparisons of IMD s performance, practices and policies with peer funds. 55. After investing heavily in updating its infrastructure and modernizing its work processes and operations, IMD is in a position to move towards strengthening governance and policy implementation. The Director will oversee more efficient and secure operations at IMD. The Director will also ensure synchronized and smooth transition to new work environment and new work processes and procedures brought by automation and modernization of IMD s infrastructure. 56. In view of the need to compete with financial institutions, corporations, sovereign wealth funds and governments in order to hire the best talent available, IMD will work to establish a working environment that will attract talented, ambitious and highly motivated investment professionals and is supportive to the retention of qualified investment professionals. Component 2: Programme of work Investment Section Objective of the Organization: The long-term objective is to achieve an optimal, real return for the Fund without undue risk while observing the four investment criteria of safety, profitability, liquidity and convertibility approved by the General Assembly. Expected accomplishments (1) A long-term annualized real rate of return for the investments of the Fund of 3.5 per cent, as adjusted by the United States consumer price index. (2) Consistent outperformance of the Fund s investments relative to the policy benchmark, which is 60 per cent in equity, 31 per cent in fixed income, 6 per cent in real estate and 3 per cent in cash. (3) Reduction of currency and country risk through sound diversification. (4) Diversification of investments into alternative asset classes, including private equity, infrastructure, commodities, timber, agriculture and hedge funds of fund. Indicators of achievement (1.1) Total Fund return against the Fund s objective over a 10-year period. (2.1) Total return against the policy benchmark over a 5-year period. (3.1) Number of currencies invested in. (3.2) Number of countries invested in. (4.1) Allocation of alternative asset classes invested in as a percentage of the total Fund. Page 21