Governing Board of the Pension Fund

The Governing Board of the Pension Fund (PFGB) held its third meeting in its new composition on 18 February 2008. At this meeting, the PFGB decided to submit to CERN’s governing bodies the actuarial review as at 1st January 2007, together with an explanatory note relating, in particular, to the trends since the previous review and the recommendations. In the latter regard, the PFGB decided to support the actuary’s recommendation to increase contributions by 0.76% in order to maintain, at the end of the 30-year projection period, the same funding ratio as at the beginning of the period, in accordance with a decision taken by the CERN Council in 2002. In its explanatory note, the PFGB also made it clear to the governing bodies that it considers a comprehensive revision of the approach used for actuarial reviews to be essential in the context of the review of the Fund’s funding policy and principles. In particular, the PFGB advocated the creation of an asset fluctuation reserve and the reduction of the projection period in order to improve the predictability of projections.

The PFGB also approved the document on the adjustment of pensions for 2007. According to the actuary’s calculations for the next three years, i.e. until 2010, the rate of under-indexation to be applied to the Geneva consumer price index from August to August of each year is 81.2%. This rate will be revised by the actuary at the next three-yearly review, scheduled for 2010.

The PFGB also approved the new strategic asset allocation to be submitted to CERN’s governing bodies in June, together with the appointment of PriceWaterhouseCoopers as a specialised consultant with the mandate to conduct the special additional annual audit of the Fund in line with the new governance measures decided by the CERN Council. It should also be noted that the PFGB decided that the Pension Fund’s accounts must be compiled in accordance with the same principles as those followed by CERN, namely the International Public Services Accounting Standards (IPSAS). Wherever appropriate standards are not available in IPSAS, the IFRS/IAS standards are applied by analogy.

Regarding investments, the Board was informed that the return on the Fund’s assets in 2007 was 6.2% which, according to the Swiss association of provident institutions, ASIP, places the CERN Pension Fund in the top 5% of Swiss pension funds, the mean return being 1.8%. However, performance has fallen off sharply in the meantime and by the end of January the excellent 2007 result had been partially cancelled out. Still on the subject of investments, the Administrator presented an overview of the Fund’s exposure to derivatives markets, informing the Board that, in line with the policy to strictly avoid leverage, a very strong cash position was maintained and that the total derivatives holdings amounted to only 40% of the available cash.

Finally, the Board reviewed the work in progress in its four working groups, the project aimed at a new IT structure for the Fund, the appeal lodged with the ILOAT and the observations made by the External Auditors.

Finally, the Governing Board noted, with regret, the deaths of the following beneficiaries of the Fund:

Mr Michel FRANCESCHI

Mr Ulrich JACOB

Mr Frank LEHMANN

Mr Murray ROSS

Mr Pierre BERTHOLET

Mr Jean-Pierre COLLET

Mr Jacques ROMAND

Mr Pierre REY

by HR Department