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STAFF COMMITTEE 2004-2005
ANNUAL REPORT
1.
Report of the Regular Staff Assembly 2004
The regular Staff
Assembly was held on July 19, 2004 to install the 2004-2005 Staff
Committee. At that meeting the following reports were presented:
annual report of the 2003-2004 Committee, Treasurer’s report to June
2004, report of the Staff Representative on the Retirement and Pension
Fund Committee, and the report of the 2004-2005 Nominating Committee.
2.
Report of the 2004-2005 Committee
The Committee
comprised Clara Estrada, President; James Kiernan, Vice President;
Gladys Berly, Secretary; Ana María Lemos, Pro Secretary; Fernando López,
Treasurer; Miguel Ángel Merino, Pro Treasurer; Francisco Coves, Michael
Thomas, and Stella Villagrán as members; Christina Cerna and Ana María
Lemos as alternate members, along with Alfonso Munévar and Daniel Perna
as representative and alternative representative on the Retirement and
Pension Fund Committee. The administrative staff of the Committee was
represented by Corina Alvarez.
The Committee is
grateful for the contribution of colleagues who represented us on the
Joint Committee on Health Insurance, the Joint Advisory Committee on
Reconsideration, the Joint Disciplinary Committee, the Leo S. Rowe Award
Committee, and the Joint Advisory Committee on Employee Parking; as well
as other colleagues who also assisted us in various staff subcommittees
such as, the Art Group, Children’s Christmas Party, Editorial, Fairs and
Bazaars, and Sports. The Staff Committee is also grateful for the
collaboration of the Nominating Committee and its election officers, as
well as those on the Teller Committee.
3.
Meetings with the Secretary General-Elect and the Acting Secretary
General
The Committee met with
Secretary General-Elect, Miguel Ángel Rodríguez, to express staff
concerns on topics such as: parity with the United Nations, continuing
contracts, and policies on harassment in the workplace. At that meeting
the Committee presented a report with a brief explanation of contractual
rights of OAS employees and requested information on the restructuring
plan.
When the Secretary
General resigned, the Committee continued its discussions with the
Acting Secretary General, reiterating the same concerns expressed to the
outgoing Secretary General. Later other problems were also considered
and joint efforts were made to solve them. These meetings resulted in
the approval of the Executive Order on Prohibition against Workplace
Harassment; the publication of a new list of candidates eligible for
Continuing Contracts; and convocation of the Advisory Committee on
Reduction in Force. It was also decided that performance evaluations
would be carried out during the calendar year, beginning in January and
ending in December. During this period the Acting Secretary General
also approved the Executive Order on Protection for Whistleblowers,
Informants, and Witnesses, after consultation with the Staff Committee.
4.
Board of Consultation
Due to the many
changes in Executive Order 04/01 and the repercussions there from, the
Committee requested a meeting of its Advisory Board to exchange ideas,
analyze the changes and their effect with respect to parity with the
United Nations and on staff as a whole. The Committee expresses its
gratitude to members of the Board and looks forward to their continued
valuable collaboration.
5.
Child care
A staff subcommittee
was established to address this subject. The group has continued to
work diligently, meeting with several companies of interest and with
staff in charge of the space available within the General Secretariat.
It is our hope that a decision will be made later this year.
6.
Joint Committee on Employee Parking
Since there appeared
to be some irregularities regarding authorized staff parking in the
General Secretariat buildings and in the management of parking funds,
the Staff Committee requested its representatives on the Joint Committee
on Employee Parking to investigate the matter. Although a transparent
outcome has not been achieved, work is continuing in that respect. The
subject of parking fees was also discussed and we are pleased to inform
you that there has been an improvement in the assignment of parking
spaces.
7.
Health Fair
Every year the Office
of Human Resource Services holds a Health Fair for staff and their
relatives. Since this event takes place twice a year and the Staff
Committee makes a financial contribution to several General Secretariat
activities, the Committee decided to make just one annual contribution
to the Health Fair.
8.
Updating contributions
The Committee has
studied a new table for updating member contributions to the Staff
Committee. The new table is based on the pensionable salary scale
rather than on the basic scale as is currently the case. It will help
to achieve a more equitable system of payment for contributors. The
revised table will be handed over to the new Committee to be circulated
shortly once agreement on it has been reached.
9.
Terry Woods Award
Taking into account
that the Service Award Ceremony for OAS
Pins was scheduled for April
14, the Committee published the notice for nominations for the Terry
Woods Award and selected two awardees. The Office of Human Resource
Services was unable to hold the event, for various reasons, so the
Committee convened a Special Staff Assembly on July 7, to bid farewell
to Ambassador Luigi Einaudi who, during his tenure as Acting Secretary
General, recognized the value and capability of staff in their service
to the Organization. At that meeting we presented the Terry Woods Award
to Ambassador Einaudi, since he was one of the candidates selected. The
Committee also took the opportunity to thank Sandra Honoré, Chief of
Staff, for her efficient work especially on the personnel matters raised
with the Acting Secretary General.
10.
Craft Shows, Bazaars, and Gift Shop
The Association
promoted two craft shows, a Christmas Bazaar, and the sale of items in
the Gift Shop. The proceeds of these sales are listed in the
Treasurer’s report.
11.
Administrative Tribunal
Following the
presentation of the Annual Report to the Permanent Council by Mr. Morton
Sklar, President of the Administrative Tribunal, the Committee sent him
a communiqué expressing its agreement that the Tribunal enjoy a greater
degree of administrative and financial independence and included a copy
of the letter sent by the Committee to the Acting Secretary General on
that subject.
12.
Cafeterias - Main and Administrative Buildings
The Committee began to
take steps for the provision of cafeteria services in the Main and
Administrative buildings. The service was established in the Main
building but with rather limited opening hours. An adequate location
for an eating area for staff who work in those buildings was also
requested. This request has not yet been granted.
13.
Assistance to countries affected by natural disasters
Following Hurricanes
Frances and Ivan, the Committee opened an account at the Credit Union to
collect donations which were later handed over to the Caribbean Disaster
Emergency Relief Agency through the Director of the Office of the
General Secretariat in Barbados, where the headquarters of that agency
is located. A similar operation was carried out later to assist Haiti
and those funds were sent to the OAS Office in Haiti to assist the
people of Gonaïves, the area most affected in that country. The total
amount collected was $5,122.00.
14.
Legal consultations
Following the impact
of the Restructuring of the General Secretariat and at the request of
several colleagues, the Committee contacted two lawyers: Robert
Wallace, who has represented staff in several “class action” cases, and
Robert Aguirre, who has defended individual staff members. The
Committee requested their consultation fees and decided to keep them
informed as events unfolded. The decision on the terms of their services
to those staff members who may need them for work-related issues also
remains pending.
15.
Special Assemblies
Following the publication of Executive Order 04/01 and subsequent
correspondence, the Staff Committee convoked a Special Staff Assembly to
inform staff about steps taken by the Committee before the Secretary
General. At the end of the meeting, it was decided that the Assembly
will remain in permanent session, since changes that could affect the
situation of staff members were anticipated.
A second meeting was
held to inform staff of a letter sent to the Acting Secretary General to
consult with him on several issues that would affect staff, among them:
a reduction in force and the possibility that grade levels may be
lowered across the board. The Acting Secretary General attended that
meeting to respond to those concerns. In his presentation, the Acting
Secretary General touched on the subject of the 2006 program-budget
indicating that he had tried to minimize any damage to the staff of the
Organization. He stated that he did not want to commit to closing
offices arbitrarily nor to continue the policy of cutting equally across
the board. In fact 22 positions were being eliminated to reach the
budgetary ceiling established by the member states but efforts would be
made to fill these positions with vacant posts.
The Director of the
Department of Legal Affairs and Services was then given the floor and he
referred to the subject of continuing contracts, stating that they were
renewed automatically each year and were guaranteed an indemnity if a
post was eliminated, in the same way as in the career service. However,
staff with continuing contracts did not have bumping rights like the
career service staff.
16.
Letters sent to the Secretary General-Elect and then to the Acting
Secretary General
August 11, 2004 –
The Staff Committee
submitted two short information documents to
Secretary General-Elect, Miguel Ángel
Rodríguez, as a background
to the subject of parity with the United Nations. Also
included with these documents was a summary of the jurisprudence of the
OAS Administrative Tribunal on cases related to this subject.
October 7, 2004- to Miguel Ángel Rodríguez,
expressing the Committee’s concern about the survey that was being
carried out in the General Secretariat. That survey was requested by
the new administration and although it was supposed to be voluntary, in
many of the interviews, staff members were being asked if they preferred
a reduction in salary or to lose their job. The Committee also
expressed its uneasiness with the persons conducting the interviews
since it was clear that they had no knowledge of the Referendum on
Parity with the United Nations or of General Secretariat operations.
October 8, 2004 – to Miguel Ángel Rodríguez,
forwarding a document in which it stated the background, justification,
and recommendation to implement the Policy on Psychological Harassment
in the Workplace. The document was prepared by a subcommittee
comprising a group of staff members and representatives of the Secretary
General.
October 14, 2004 – to Miguel Ángel Rodríguez,
expressing its unease with the naming of James Harding, in accordance
with Executive Order 04/01, as representative of the Secretary General
to the Retirement and Pension Fund Committee, in his capacity as
Director of the Department of Administration and Finance. The Committee
requested that Mr. Harding be replaced.
October 21, 2004 – to Luigi R. Einaudi,
in charge of the General Secretariat, requesting confirmation of salary
increases for General Services staff in accordance with United Nations
parity.
October 25, 2004
– to Luigi R. Einaudi, in
charge of the General Secretariat, thanking him for his invitation to
attend a private meeting of the Permanent Council on October 22, in
which he would present the revised 2005 program-budget. The Committee
thanked him especially for his concern about the morale of staff members
and for maintaining the parity system with the United Nations.
November 15, 2004
– to Luigi R. Einaudi,
Acting Secretary General, requesting an extension of the term of Juan
Luis Colaiácovo, as staff representative to the Medical Insurance Trust
Fund Committee.
December 15, 2004
– to Luigi R. Einaudi,
Acting Secretary General, requesting that all vacancies occurring as a
result of voluntary and/or mandatory retirement be filled by employees
who, due to the restructuring of some offices, may find themselves
without a post in the short term.
December 17,
2004 –
to Luigi R. Einaudi, Acting
Secretary General, referring to the restructuring of the General
Secretariat, summarized in three points: (a) anticipated retirement and
termination of contracts; (b) reduction in force (RIF) and relocation of
staff; and (c) restructuring, budget deficit, salaries, benefits, and
other considerations.
January 5, 2005 –
to Luigi R. Einaudi,
Acting Secretary General, thanking him for his reply to the letter dated
December 17 and for the reference made to the competence and spirit of
service of General Secretariat staff in his presentation of the 2006
program-budget to the Permanent Council. The Committee also thanked him
for pointing out that in fact staff members are not overpaid, a
statement which was also made in the Deloitte & Touche report.
January 6, 2005 –
to Luigi R. Einaudi,
Acting Secretary General, stating that it was necessary to maintain the
continuing contract process and, to that end, reminded the Acting
Secretary General of the need to publish the list of the names of staff
members who qualify for the competition.
January 17, 2005 – to Luigi R. Einaudi,
Acting Secretary
General, forwarding requested comments and suggestions with regard to
Executive Order 04-01 corr. 1.
February 24, 2005 –
to Luigi R. Einaudi,
Acting Secretary General, bringing to his attention the preoccupation of
staff members and requesting a meeting with him to discuss the following
matters of concern: compression of grades; OAS Classification
Guidelines (the same as the United Nations) and parity with the United
Nations; and termination of contracts, among other ongoing matters.
Finally, the Committee informed him of the next Staff Assembly in which
those topics would be discussed and invited him to attend.
March 21, 2005 – to Luigi R. Einaudi,
Acting Secretary
General, expressing staff concerns regarding the lack of independence of
the Administrative Tribunal. In the new organizational structure, this
body falls under the Department of Legal Affairs and Services, where the
very lawyers who defend cases before the Tribunal work. The Committee
requested that the necessary measures be taken to separate the Tribunal
from the Department of Legal Affairs and Services and ensure that it has
both administrative and budgetary independence.
April 12, 2005 – to Luigi R. Einaudi,
Acting Secretary General, requesting that voluntary retirement programs
be promoted in such a manner that all staff members who wish to benefit
from the program may do so on an equal footing.
May
12, 2005 -
to José Miguel Insulza,
Secretary General-elect, congratulating him on his election and
requesting a meeting with the Staff Committee as soon as possible.
May
18, 2005 – to Luigi R. Einaudi,
Acting Secretary General, expressing concern on the proposed
modifications to the General Standards and the Staff Rules in the
program-budget for 2006.
May
31, 2005 – to José Miguel Insulza,
Secretary General, regretting that a meeting with him prior to his
departure for the General Assembly in Fort Lauderdale could not take
place. The Committee’s greatest concern was the proposed modifications
to the General Standards and the Staff Rules, as presented in the
program-budget for 2006, which if approved, would affect some staff
members. The Committee advised that a very careful, detailed study of
these measures should be carried out.
June 21, 2005 – to José Miguel Insulza,
Secretary General, referring to the Handbook for New Staff Members,
which, on page 35, regarding sick leave for career service staff, refers
to Staff Rule 107.1 which states: “... Career Service staff have the
right to sick leave for up to six months on full salary and up to six
months on half salary during any calendar year.” The Handbook further
states that no decision has been reached yet as to whether staff members
with continuing contracts will have the same benefits. Therefore, the
Committee respectfully requested that the same benefits be granted to
staff members with continuing contracts.
17.
Treasurer’s report
See Financial Statements:
http://www.staff.oas.org/documents/Profit_and_Loss_2005.pdf
REPORT OF THE STAFF REPRESENTATIVE OF THE
RETIRMENT AND PENSION FUND COMMITTEE
TO STAFF MEMBERS PARTICIPATING IN THE FUND
We are pleased to
present the report on activities of the Retirement and Pension Fund
Committee for the period from July 2004 to June 2005.
Activities
In mid 2004 the status
of the Fund was of great concern due to the instability of the stock
market at that time. During most of the second half of 2004, the trend
in rates of return continued to decline and it seemed as though it would
not return to its level before the end of the year. It was not until
November and December 2004 when there was a significant turnaround in
the abovementioned trend. As a result, the return on the portfolio for
the second half of 2004 reached 7.81%, while the annualized rate reached
10.9%.
In October 2004, I
presented a proposal to review the accreditation policy and the general
reserves to the Committee, with a view to restructuring the reserves
within a reasonable period of time. This would guarantee participants
an annual return with a minimum increase of 1.5% in the event that the
return will be negative or less than 1.5%. Since we did not give
consideration to the 1.5% minimum, we proposed that approximately 30% of
the total return on the portfolio could be used to cover the reserves
while the other 70% could be used to credit participants’ accounts. The
document gave rise to an extensive study within the Committee on the
basis of documentation supplied by the Secretary-Treasurer. During
these exchanges (around October-November 2004) the representative of the
Secretary General drew up another proposal, which consisted of finding
the formula to guarantee a minimum return equal to the annual increase
in the consumer price index, for study. Mr. James Harding also
requested the inclusion of these results in the future study of assets
and liabilities. Finally the Committee authorized the preparation of a
study of assets and liabilities in which the elements of the proposals
presented by the staff representatives and the representative of the
Secretary General should be included. This study is expected to be
completed by the end of September 2005.
Credits to
participants’ accounts as at December 31, 2004
The Committee met in
early 2005 to decide on interest credits to participants’ accounts as at
December 31, 2004. On that occasion the Committee considered the
proposal presented by the Secretary-Treasurer to increase the retirees’
reserves by $10 million–from $53.1 million to $63.1 million. In
addition, as all participants are already aware, the Committee
authorized an interest credit of 4.5% of account balances as at June 30,
2004. The Fund balance showed a recovery of $6.9 million at the end of
2004, from a negative balance of $19.6 million to a negative balance of
$12.7 million.
After observing that
in effect the reserves for retirees was not subject to an increase of
$10 million, in May 2005, following consultations within the Committee
and confirmation from the Secretary-Treasurer, we informed participants
of this significant change in the Fund’s commitments. Consequently, the
balance, which had been reported as negative $12.7 million, was reduced
to negative $2.7 million, therefore the recovery balance of the fund
changed from $6.9 to $16.9 million.
In fact, the
conditions of the stock market, combined with the investment policy of
the Fund enabled a more rapid recovery of the Fund than anticipated when
we were elected.
Audit of accounts as
at December 31, 2004
On May 18, 2004, the
Committee decided to separate the operational aspects of the Fund from
the auditing process within the General Secretariat, as was the custom
in the past. However, for bidding purposes, the auditing of the Fund
was shared with that of the General Secretariat. The Fund opted for an
auditing firm that would respond more specifically to its needs
particularly in the area of investments and therefore chose the firm
KPMG to carry out this task. Due to structural problems within that
firm, which were only brought to our attention later on, there was a
delay in carrying out the 2004 audit. The Committee therefore decided
to contract Ernst and Young to carry out the audit. Ambassador Michael
I. King, Chairman of the Committee, transmitted a letter dated June 15,
2005, to the Chair of the Permanent Council, stating that as soon as the
auditor’s report was ready, the financial situation of the Fund will be
presented to the Permanent Council for its information. The auditor’s
report, which was formally submitted at the meeting of July 21, 2005, is
at the disposal of all participants in the Office of the Retirement and
Pension Fund. As is normal practice, it will be published on the OAS
website together with the recently published Annual Report of the
External Auditors as at December 31, 2004.
Interest credits to
participants’ accounts as at June 30, 2005
On July 21, 2005, the
Committee held a meeting to study the financial situation of the Fund,
since its portfolio had been reduced by $7 million and the rate of
return was only 0.69%. Given this scenario, the decision on interest
credits was quite difficult. Three possible levels of credit were
explored: i) offer zero percent and wait for the second semester to
offer the minimum or a higher credit, depending on the rate of return in
December; ii) offer half of minimum–0.75%; or iii) offer the anticipated
annual minimum as prescribed by the accreditation policy currently in
force. In principle, we were more inclined toward option ii but this
idea was not favorably received because the accreditation would have
been more than the Fund’s rate of return. After some discussion among
the trustees on the situation of the Fund as of June 30 and on the
rather low rate of return on the value of the portfolio, and taking into
account the fact that the Fund balance had improved significantly over
that of June 2004, the Committee decided to pay 0.50% interest credit to
participants based on balances as of December 31, 2004.
We must emphasize that
as of June 30, 2004, the assets of the Fund totaled $299 million while
its liabilities reached $318 million, resulting in a deficit of $19
million as of June 30, 2004. On the other hand, as of June 30, 2005,
the Fund’s assets totaled $301 million and liabilities $306 million with
a deficit of approximately $5 million. Therefore, the Fund has made a
recovery of $14 million between July 2004 and June 2005.
We wish to take this
opportunity to publicly express our recognition of and gratitude to
Ambassador Michael I. King for the efficient and measured manner in
which he managed the work of this Committee. Also worth underscoring is
the fact that the Committee acted with a high level of equanimity in the
distribution of profits, after providing an adequate reserve for
pensioners in keeping with the situation at hand. Everyone has received
equal treatment and consideration. The trustees of the Fund decided to
transmit a joint communiqué which we believe is of interest to all
participants and is aimed at answering questions raised by some
participants regarding equity in the accreditation of funds.
Topics pending
As our term of office
comes to a close, we have identified the following topics as pending for
consideration and decision: a) study of assets and liabilities of the
Fund which has already begun and is being prepared by a consulting firm;
and b) promotion of the proposal to modify the accreditation policy,
which we presented during the last quarter of 2004, taking into account
the results of the assets and liabilities study. The objective is to
create a formula that guarantees a level of growth in participants’
accounts while preserving the financial health of the Fund.
We believe that in the
past year the Fund has improved as indicated by the abovementioned
figures. We wish to express our appreciation for the confidence placed
in us as elected representatives. We believe that we have met
expectations, given the current situation, and as we end our term of
office, the Fund is still in an excellent actuarial position. According
to the 2004 actuarial study, the Fund will remain healthy over the long
term. The study also shows that that Fund is 114% funded. We are well
on the way to replenishing reserves and have paved the way for a more
generous accreditation policy in the near future.
We are confident that
the recently elected representatives will continue to support an
investment and accreditation policy that satisfies the interests of all
participants while preserving the financial health of the Fund.
We wish to reiterate
our gratitude in particular to Ambassador Michael King, President of the
Retirement and Pension Fund Committee for his support and our
recognition of the soundness of the proposals made by the current
representatives on several occasions. We are grateful as well to the
Secretary-Treasurer and the staff of the Fund.
Daniel Perna
Alfonso
Munévar
Alternate
Representative Principal
Representative
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