1. The 71st Meeting of the Executive Council
Considerations related to the After-Service Health Insurance (ASHI) Liability
EC-71/Doc.6(3) and INF.6(3)
Presentation to
The 71st Meeting of the Executive Council
Geneva, June 2019

2. ASHI Considerations - Background
Decision 69 of EC-69:
Keep in force Resolution 14 (EC-LXI) – increasing payroll costs for the funding of the reserve for ASHI
Requests SG to develop a comprehensive proposal, including measures to reduce or contain overall costs of ASHI scheme
Consider benefit from harmonization with UN-wide scheme and other UN organizations

3. ASHI Considerations - Background
Decision 60 of EC-70:
Develop cost-containment measures related to ASHI
Propose recommendations which respond to the report of the UN Working Group on ASHI

4. ASHI Considerations - Background
ASHI Liability at 31 December 2018 was CHF 61.1 million.
Increased of 47% over the period to CHF 61.1 million
Primarily result of actuarial valuation
Some increase due to number of retirees
Increases were offset by the increase in normal retirement age, which will have further effect on containing the liability in future years
In addition, WMO is contingently liable for additional CHF 1.2 million

5. ASHI Considerations - Background
To date, WMO has:
Followed UN Working Group on ASHI and worked with other UN Organizations on cost matters
Considered ACABQ report in connection with long-term funding considerations
Continued funding pay-as-you-go costs through a specific payroll charge

6. ASHI Considerations - Background
UN Working Group on ASHI
Issued 3 reports to UN General Assembly
Latest report on UN Working Group on ASHI (2019) recommended:
All avenues of health insurance cost containment should be explored in context of inter-agency discussion
Pay-as-you-go approach should continue for currently existing staff
Pay-as-you-accrue approach for future

7. ASHI Considerations - Background
However, Advisory Committee on Administrative and Budgetary Questions (ACABQ) reviewed and recommended:
UN should continue to explore further options and considerations for efficiency and cost containment
UN should continue the pay-as-you-go approach for all staff (current and future) at the present time

8. ASHI Considerations - Background
Funding pay-as-you-go costs through specific payroll charge – currently 3%
Payroll charge is included as part of staff standards costs included within the budget and, therefore, funded through assessments and voluntary contributions

9. ASHI Considerations - Background
For last 5 years, pay-as-you-go payments have exceeded the current 3% payroll charge:
2018 increase due to reduction in overall staff costs
Therefore, 3% payroll charge no longer sufficient
2018
2017
2016
2015
2014
Pay-as-you go payments in excess of payroll charge
56 000
83 000
45 000

10. ASHI Considerations - Proposal
Proposed Resolution:
Approve increase of the charge on payroll costs for the funding of the reserve from 3% to 4% beginning 1 January 2020 (annual CHF )
Request Secretary-General to:
Liaise with other UN Organizations to identify furhter efficiency and cost-containment measures
Determine appropriate charge on staff costs for non-consolidated entities to cover related ASHI exposure

11. FINAC Guidance Cg-18/INF. 9.6(1), Recommendation 7
That the Executive Council:
Adopts draft Resolution 6(3)/1 (EC-71) – Considerations Related to the After-Service Health Insurance Liability;

12. Thank you
Merci