Public Meeting - 14 December 2009

2 Public meeting / 14 Dec.2009 Why this emergency meeting? The facts: what has been happening recently? The facts: what has been happening recently? Our position: why is this not acceptable? Our position: why is this not acceptable? The financial situation of the Fund: record deficit The financial situation of the Fund: record deficit The dangers involved: what to look out for The dangers involved: what to look out for Why act? we need your support! Why act? we need your support!

3 Public meeting / 14 Dec.2009 Why this emergency meeting? The facts: what has been happening recently? The facts: what has been happening recently? Our position: why is this not acceptable? Our position: why is this not acceptable? The financial situation of the Fund: record deficit The financial situation of the Fund: record deficit The dangers involved: what to look out for The dangers involved: what to look out for Why act? we need your support! Why act? we need your support!

4 CERN Council Public meeting / 14 Dec.2009 Reminder: Pension Fund bodies Pension Fund Governing Board Investment Committee General Manager Pension Fund Unit Pension Fund new Governance since June 2007

5 Public meeting / 14 Dec.2009 Information to CERN Staff Staff meetings – Sept/Oct. 2009

6 Public meeting / 14 Dec.2009 Chronology of events 12 Nov. : Intervention of the SA at the PFGB meeting New information: experts of PFGB are invited to December Council meeting Our reaction: ask for D. Duret (Vice-President) to be invited at the same time 3 Dec.: Meeting with President of CERN Council No agreement reached 9 Dec.: Open Letter* to President of CERN Council 10 Dec. : Information Flash* to the Staff and Pensioners 10 Dec. : Answer* from President of CERN Council Today : Answer* to President of CERN Council Today : Public meeting * documentation available on the SA website

7 Public meeting / 14 Dec.2009 Position of President of CERN Council Agenda of CERN Council meeting – 17 & 18 Dec Restricted session Restricted session 14. Pension Fund 14. Pension Fund - Report by the Chairman of the Governing Board - Report by the Chairman of the Governing Board - Discussion of the Report of Working Group 2 White Paper - Discussion of the Report of Working Group 2 White Paper - Terms of Appointment of the members of the Investment Committee - CERN/2888/RA - Terms of Appointment of the members of the Investment Committee - CERN/2888/RA Closed session Closed session 2. Pension Fund 2. Pension Fund - Further discussion of the Report of Working Group 2 - Further discussion of the Report of Working Group 2 Open session Open session 7. Adjustment of Pensions for Adjustment of Pensions for 2010 Employee Rep. invited PFGB experts invited but Employee Rep. not invited

8 Public meeting / 14 Dec.2009 Why this emergency meeting? The facts: what has been happening recently? The facts: what has been happening recently? Our position: why is this not acceptable? Our position: why is this not acceptable? The financial situation of the Fund: record deficit The financial situation of the Fund: record deficit The dangers involved: what to look out for The dangers involved: what to look out for Why act? we need your support! Why act? we need your support!

9 Public meeting / 14 Dec.2009  Council WG (Levaux) – Pension Fund new Governance - June 07  Composition of PFGB (members)  Two nominated by CERN Council  One nominated by ESO Council  One nominated by DG of CERN  Two nominated by CERN Staff Association  One nominated by ESO Staff Association Employee reps.  One nominated by CERN/ESO pensioners  Two professional experts nominated by CERN Council Pension Fund Governing Board Employer reps. President nominated by CERN Council Vice-President nominated by CERN Council

10 Public meeting / 14 Dec.2009 Our position: problem of principle We understand entirely that the Member State representatives need to meet on their own. We understand entirely that the Member State representatives need to meet on their own. In the area of pensions, there are two stakeholders: In the area of pensions, there are two stakeholders: The “employer” college The “employer” college The “employee” college The “employee” college The experts of the PFGB have a duty to be impartial The experts of the PFGB have a duty to be impartial It is unacceptable that the party which appoints the experts receives them in the absence of the other party. It is unacceptable that the party which appoints the experts receives them in the absence of the other party.

11 Public meeting / 14 Dec.2009 Why this emergency meeting? The facts: what has been happening recently? The facts: what has been happening recently? Our position: why is this not acceptable? Our position: why is this not acceptable? The financial situation of the Fund: record deficit The financial situation of the Fund: record deficit The dangers involved: what to look out for The dangers involved: what to look out for Why act? we need your support! Why act? we need your support!

12 Public meeting / 14 Dec.2009 Situation of the Fund Finance Committee – 11 Nov. 2009

13 Public meeting / 14 Dec.2009 Situation of the Fund Finance Committee – 11 Nov Return on assets in 2009 : ~ +10%

14 Situation of the Fund Finance Committee – 11 Nov Public meeting / 14 Dec MCHF/year +0 MCHF/year

15 Public meeting / 14 Dec.2009 Situation of the Fund Finance Committee – 11 Nov. 2009

16 Public meeting / 14 Dec.2009 Why this emergency meeting? The facts: what has been happening recently? The facts: what has been happening recently? Our position: why is this not acceptable? Our position: why is this not acceptable? The financial situation of the Fund: record deficit The financial situation of the Fund: record deficit The dangers involved: what to look out for The dangers involved: what to look out for Why act? we need your support! Why act? we need your support!

17 Public meeting / 14 Dec.2009 Situation of the Fund: our views Deficit: Deficit: Can be mostly explained by past decisions by Council Can be mostly explained by past decisions by Council Its existence has been known by Council for a long time Its existence has been known by Council for a long time In the past, Council has shown no real intention to make up this deficit In the past, Council has shown no real intention to make up this deficit It has become colossal: 2100 MCHF It has become colossal: 2100 MCHF The traditional levers are ineffective The traditional levers are ineffective Benefits: limitation due to acquired rights → future staff Benefits: limitation due to acquired rights → future staff Contributions: very little room for manoeuvre → rate > 30% of salary Contributions: very little room for manoeuvre → rate > 30% of salary Full Funding Full Funding Decided by Council in 2007: desire to keep the Fund balanced Decided by Council in 2007: desire to keep the Fund balanced White Paper from PFGB in 2009: White Paper from PFGB in 2009: Responsibility of CERN Council → additional “employer” payments requested Responsibility of CERN Council → additional “employer” payments requested Current dangers: Current dangers: Burying one’s head in the sand again?   Burying one’s head in the sand again?   Colossal deficit → a ttack on our benefits?    Colossal deficit → a ttack on our benefits?   

18 Public meeting / 14 Dec.2009 Legal framework Obligation of CERN to guarantee benefits regardless of funding situation derived from its Status of International Organization CERN has two roles: Employer + State CERN has its own social security system Acquired rights: Applicable to International Civil Servants Wide jurisprudence from ILOAT/UNAT Why do they exist for International Civil Servants? To guarantee the officials’ independence vis-à-vis their Member States To compensate for the officials’ absence of a right to vote in the State which is the IO (a right granted to other citizens in their national system to elect their government).

19 Public meeting / 14 Dec.2009 Information to CERN Staff Staff meetings – Sept/Oct. 2009

20 Public meeting / 14 Dec.2009 Information to CERN Staff Staff meetings – Sept/Oct. 2009

21 Public meeting / 14 Dec.2009 Information to CERN Staff Staff meetings – Sept/Oct. 2009

22 Public meeting / 14 Dec.2009 Why this emergency meeting? The facts: what has been happening recently? The facts: what has been happening recently? Our position: why is this not acceptable? Our position: why is this not acceptable? The financial situation of the Fund: record deficit The financial situation of the Fund: record deficit The dangers involved: what to look out for The dangers involved: what to look out for Why act? we need your support! Why act? we need your support!

23 Public meeting / 14 Dec.2009 Your priority issues - Staff Association survey/Oct st

24 Public meeting / 14 Dec.2009 Our position: problem of principle We understand entirely that the Member State representatives need to meet on their own. We understand entirely that the Member State representatives need to meet on their own. In the area of pensions, there are two stakeholders: In the area of pensions, there are two stakeholders: The “employer” college The “employer” college The “employee” college The “employee” college The experts of the PFGB have a duty to be impartial The experts of the PFGB have a duty to be impartial It is unacceptable that the party which appoints the experts receives them in the absence of the other party. It is unacceptable that the party which appoints the experts receives them in the absence of the other party.

25 Public meeting / 14 Dec.2009 Why act now: the Stakes In the PFGB Maintain the joint nature of the committee Reinforce the role of Vice-President Respect the “employee” college? Between CERN Council and PFGB Avoid another problem of confidence For the “employee” college Promised benefits (acquired rights) Pensions today, and tomorrow?

26 Public meeting / 14 Dec.2009 Council WG – OSNES : Dec. 2006

27 Public meeting / 14 Dec.2009 Council WG – OSNES : Dec. 2006

Public Meeting - 14 December 2009 Appeal to the staff and pensioners Let us join forces! Thursday 17 December