UNAT Held or UNDT Pronouncements
The UNAT noted that in its calculation of the reduction of the beneficiary’s retirement benefit, the Pension Fund had determined the rate of the overall cost-of-living adjustment due to benefits in accordance with the movement in the US consumer price index since the date of the last adjustment to be 6.4 per cent. The UNAT observed that the Fund had then prorated the overall adjustment rate in proportion to the length of time the beneficiary’s retirement benefit had been in payment and had determined that the inflationary adjustment due to him was 7/12 of 6.4 per cent, equal to 3.7 per cent. The UNAT noted that in implementation of the economy measure, the Fund had then reduced the inflationary adjustment of 3.7 per cent due by 0.5 percentage points, which had reduced the first cost-of-living adjustment to the beneficiary’s retirement benefit from 3.7 per cent to 3.2 per cent.
The UNAT held that the Standing Committee had not erred in upholding the calculation. The UNAT found that if the reduction was calculated differently, it would not only result in a significant reduction in the overall cost savings intended by the Pension Board and the General Assembly but would lead to different results for beneficiaries of the retirement benefit according to their date of separation.
The UNAT was of the view that there was no evidence to support the contention that the application of the economy measure had resulted in discrimination.
The UNAT dismissed the appeal and affirmed the decision of the Standing Committee.
Decision Contested or Judgment/Order Appealed
A beneficiary of the Pension Fund sought review of the calculation of the cost-of-living adjustment to his retirement benefit.
The Standing Committee of the Pension Board upheld the calculation of the Fund.
The beneficiary appealed.
Legal Principle(s)
The Fund has no discretion to vary benefits but must act in accordance with the rules and regulations applicable to it.
When judging the financial decisions of the UNJSPF, it is not for the Appeals Tribunal to determine the financial wisdom of the decision, or substitute its personal assessment of the economic advantages of one decision over another. Judges are not to set the levels of benefits in the UNJSPF on the basis of their financial acumen or their own perceptions of equity, which are matters of policy for the UNJSPF, best left to its specialists’ appropriate expertise. The lowest tier of judicial review applies in such instances.
The process of interpretation involves attributing meaning to the words used in a document, having regard to the context provided, reading the particular provision or provisions in light of the document as a whole, having regard to the language used, the context in which the provision appears, the apparent purpose of the provision and the circumstances attendant upon its coming into existence. The first step is to consider the literal meaning of the provision in question, with a sensible meaning of the provision to be preferred to one that does not accord with the apparent purpose of the document.
When the Fund makes changes in the pension adjustment system, it has an obligation to respect certain fundamental principles, and modifications must not be arbitrary, but reasonable, and must be adapted to the aim of the system: adjustment of pensions to cost-of-living changes in the various countries of residence of the retired staff members.