Pension fund

Letter sent on Monday 8 December 2014 to the delegates of the Member States to CERN Council

An item on the agenda of the CERN Council of Thursday 11 December concerned the CERN Pension Fund, namely a discussion of a document that proposes how to respond to the many questions concerning pensions that had been submitted by thirteen Member State delegations. That document lists all these questions and proposes, as a first step, to consider the legal feasibility and the actuarial cost to transform our current defined-benefit pension scheme into a defined-contribution scheme. Once again, several delegates show their determination to worsen our pension conditions.

The Staff Association’s Pension Commission, in a special meeting on Thursday, 4 December, has decided to send an open letter to the delegates of the CERN Council. In this letter (shown below) the Staff Association and CERN-ESO Pensions’ Association express their opposition to these intentions. We underline, once more, that the 2010/2011 measures allowed the Pension Fund to be on track to reach full funding within the 30-years’ period decided by Council in 2010 so that no action has to be taken at this moment.

Dear Delegate,

We noticed that the document “Pension Fund – Next Steps”, on the agenda of the Council Session of 11 December 2014, raises again the issue of transforming CERN’s current defined-benefit pension scheme into a defined-contribution scheme for existing and/or future staff.

We would like to recall that questions relating to this issue were already answered on several occasions. In particular, in 2006, in the framework of the Working Group 2 (WG2) studies, two legal experts, recommended by the President of the Administrative Tribunal of the International Labour Organisation (ILOAT), demonstrated that the political and administrative bodies of international organizations must respect the principle of acquired rights of active and retired members of personnel. Furthermore, its current jurisprudence indicates clearly that the ILOAT will not accept that salaries or pensions be cut because of budgetary reasons.

Moreover, as mentioned in the WG2 studies and repeated in the tutorial for delegates last September, the initial cost of setting up and the subsequent running of a defined-contribution scheme is much higher than the cost of maintaining the current defined-benefit scheme.

We understand that the Pension Fund Governing Board (PFGB) was created by Council to advise it on all issues relating to the pension matters. The “dashboard” put into place thanks to the PFGB, allows Finance Committee and Council to closely monitor the financial situation of the Fund. Thus, it has been shown that the balanced package of measures of 2010/2011 puts the Fund on the right track to reach full funding on the 2041 horizon and that there are no reasons to take any actions and to introduce new measures at this moment.

by Staff Association