GB.267/PFA/12 - Governing Body

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GB.267/PFA/12
267th Session
November 1996

Programme, Financial and Administrative Committee

PFA

TWELFTH ITEM ON THE AGENDA

Report of the International Civil Service Commission

1. The present document reports on those recommendations of the International Civil Service Commission (ICSC), submitted in its annual report to the General Assembly for 1996,⁽¹⁾ which, if approved by the General Assembly, will have direct implications for officials' conditions of service and many of which will require action by the Committee in order to avoid the need for costly retroactive adjustments. The decisions of the General Assembly on the ICSC recommendations will be taken in December, and thus too late to be considered by the Committee at its current session. These concern the base/floor salary scales, staff assessment and post adjustment for the Professional and higher categories, the methodology for determining pensionable remuneration for Professional and General Service staff, the mobility and hardship scheme, family allowances in the Professional and higher categories and the level of the education grant.

Pensionable remuneration and pension entitlements:
Common staff assessment scale

2. In 1993, the ICSC reported to the General Assembly that, as part of its 1996 comprehensive review of pensionable remuneration and consequent pensions, it would develop a common staff assessment scale for the Professional and higher categories and the General Service and related categories to determine the pensionable remuneration of both categories. The Assembly approved the procedure set out by the ICSC and requested the latter to work in close cooperation with the United Nations Joint Staff Pension Board (UNJSPB) in developing a common staff assessment scale for pensionable remuneration.

3. The ICSC and the UNJSPB considered that certain guidelines and objectives should be borne in mind in developing a common scale of staff assessment: the new scale, while reflecting average taxes at the seven headquarters duty stations, should not have an adverse impact on pensionable remuneration levels at the lower end of the scale or increase pensionable remuneration levels at the upper end of the scale.

4. After examining various alternatives, the ICSC retained that which produced pensionable remuneration levels for both General Service and Professional staff which came closest to the goals and objectives. This was agreed as the basis for its recommendations to the General Assembly. The revised scale would lead to a reduction of income inversion (the phenomenon where the same or lower net remuneration received by staff in one category leads to a pensionable remuneration higher than that of staff from another category receiving the same or higher remuneration).

5. As regards implementation, the ICSC agreed that, following approval by the General Assembly, the common scale of staff assessment for pensionable remuneration would become effective on 1 March 1997. Transitional measures would be put in place for General Service gross pensionable salaries, if required.

Professional and higher category staff:
Salaries and structure of the salary scale

6. In 1995, the General Assembly referred the ICSC's findings on the review of the Noblemaire principle back to the ICSC for it to re-examine some of the technical aspects of a new methodology that had led the ICSC to recommend a salary increase for Professional and higher staff together with a restructuring of the salary scale in order to redress the compression of the scale, which has been an unintentional side-effect of salary adjustments over many years.

7. The ICSC maintained the technical conclusions it reached last year;⁽²⁾ however, due to developments in the United States civil service and the amount of the post adjustment increase in New York in November 1995, and in the absence of any increase in the base/floor salary scale in 1996, the margin and thus the size of the recommended salary increase had changed.

8. The ICSC has recommended an increase in the base/floor salary scale (as well as corresponding adjustments to the staff assessment rates) that would restore the level of the margin to its "desirable mid-point of 115" in 1997 (forecast: 109.7 for 1996); a restructuring of the salary scale in accordance with last year's findings (notably implying higher salary increases at managerial levels and at the lowest grades); and a consolidation of post adjustment into net base salary ("no loss-no gain"). Thus, the recommended net scale contains a real increase of 3.1 per cent for all Professional staff, an additional average increase of 1 per cent to implement the restructuring proposals, and a consolidation of 2.5 percentage points of post adjustment to reflect the movement of United States salaries in the period 1995-96. Since the new scale is also used as the basis for determining the mobility and hardship allowances and separation payments, these will increase accordingly. The effective date of these changes would be 1 March 1997. The revised net scale for staff with dependants and a table showing the real increases at each level are appended.

9. Implementation of these measures by the ILO will require amendments to article 3.1 of the Staff Regulations with effect from 1 March 1997.

Post adjustment issues

Working group on the operation of the post adjustment system

10. In response to a request by the General Assembly, the ICSC established a working group to identify those elements of pay that should not be indexed for local cost-of-living changes, evaluate their relative importance as a percentage of pay, and study the appropriateness of applying the out-of-area index to some of these elements. Although the Working Group could not arrive at a common proposal, the ICSC nevertheless decided to modify the post adjustment system with effect from 1 March 1997. In future calculations for headquarters duty stations and Washington, after excluding amounts for savings (non-consumption items: a flat rate of 5 per cent), out-of-area expenditures (minimum: 20 per cent) and pension contributions, only some 63 to 71 per cent of pay will be adjusted for the local cost of living. Staff at Washington and Montreal stand to make small gains; all others will see a decrease. For Geneva, the resulting drop in the post adjustment index is estimated to be about 4.6 index points in March 1997.

Geneva post adjustment

11. The Director-General informed the Committee at the Governing Body's 265th Session (March 1996)⁽³⁾ that the Assembly had requested the ICSC "to establish in 1996 a single post adjustment index in respect of staff members whose duty station is Geneva, which is fully representative of the cost of living of all staff working in the duty station, and which ensures equality of treatment with staff in other headquarters duty stations". The ICSC sought the advice of its subsidiary body, the Advisory Committee on Post Adjustment Questions (ACPAQ), on the approach that should be followed to give effect to the Assembly's request. ACPAQ had pointed out several technical difficulties with respect to data collection and analysis. In addition, there were policy, administrative and legal ramifications to the matter. The combination of these factors meant that a single post adjustment index for Geneva (i.e. reflecting actual costs on either side of the border) could not be established in 1996. The ICSC will report to the General Assembly on its progress in resolving the various issues.

Review of the mobility and hardship scheme

12. The General Assembly requested the ICSC to review the operation of the scheme in 1992. At that time the ICSC had recommended that the parameters of the scheme be maintained unchanged, as the scheme was functioning efficiently and to the satisfaction of the organizations and staff. A follow-up review had been scheduled for 1996, and the Assembly indicated a number of elements to which it required the ICSC to pay particular attention. As a result of the 1996 review, the ICSC recommended maintaining the scheme essentially in its present form, but with the following modifications: introduction effective 1 January 1997 of a time-limit of five years (with exceptional extension to seven years) on the non-removal element (at present, there is no time-limit); and delinkage of hazard pay from the base/floor salary for Professional and higher category staff, and a review of the amounts every two years. For locally recruited General Service category staff, hazard pay would continue to be linked to the local salary scale, and would remain set at 20 per cent of the mid-point of the relevant scale.

13. The introduction of a time-limit for the non-removal element will require an amendment to article 3.11 of the Staff Regulations.

Family allowances for staff in the Professional and higher categories

14. In accordance with the agreed methodology, levels of family allowances are reviewed every two years to ascertain whether they are in line with the social legislation and practices prevailing in the seven headquarters duty stations. The ICSC has recommended an increase of 7.98 per cent in the present levels of the children's allowance (including that for disabled children) and the secondary dependant's allowance, with effect from 1 January 1997.

15. These increases will require amendments to article 3.12 of the Staff Regulations with effect from 1 January 1997.

Review of the level of the education grant

16. Based on the existing methodology, which requires a review of the level of the grant every two years, and in accordance with the accepted criteria, the ICSC is recommending increases in the maximum grant for expenditures in the following currencies, to enter into effect for the school year in progress on 1 January 1997: a 5 per cent increase in the Italian lira; a 6.8 per cent increase in the Netherlands guilder; a 10 per cent increase in the Swiss franc, the pound sterling and the Swedish krona; a 10.5 per cent increase for expenditures incurred in US dollars in the United States, and a 12.1 per cent increase for the Norwegian krona. The special grant for disabled children and the flat rate for boarding in the above currencies would be increased by the same percentages. These changes require amendments to articles 3.14 and 3.14bis of the Staff Regulations.

17. Pending the comprehensive review of 1997, the ICSC has recommended that the amount of additional reimbursement of actual boarding costs for staff at designated duty stations be increased for three currency areas (pound sterling, Italian lira, US dollar in the US) in order to align it with the normal reimbursement amount. This change will require an amendment to article 14.5 of the Staff Regulations.

18. Also pending the above-mentioned review, the Chairman of the ICSC approved special measures for the education grant in Beijing to allow for the reimbursement of admissible expenditures up to the approved level of the grant in US dollars in the US area.

Financial implications

19. At this stage it is difficult to estimate precisely the financial implications of the above recommendations, as decisions on implementation and transitional measures have yet to be announced. The following estimates have been based on the probable implementation measures as advised by CCAQ. The net additional cost of all of the above proposals is estimated at some $1.1 million during the current biennium, and is covered by provisions made in the Programme and Budget for 1996-97. This amount consists of --

The cost of the proposed changes to the salary scale for Professional staff for the current biennium would be partially offset by the reductions in post adjustment at headquarters duty stations. Subject to exchange rate movements and transitional measures, the net cost in the 1996-97 biennium is estimated at some $0.8 million.
The recommendations concerning the family allowances for Professional staff and the increase in the level of education grant have been estimated to cost $0.1 million and $0.2 million respectively in the current biennium.
The ICSC's recommendations to modify the mobility and hardship scheme and the decision to establish a new common scale of staff assessment for pensionable remuneration will have a negligible financial impact.

20. The Committee may wish to recommend that the Governing Body --

endorse the recommendations of the ICSC, subject to their approval by the General Assembly of the United Nations, on the following entitlements, as described in this paper:
1. an increase in the net base/floor salary scale and a revision of the staff assessment rates with effect from 1 March 1997, for staff in the Professional and higher categories;
2. an increase of 7.98 per cent in the present levels of the children's allowance and the secondary dependant's allowance for staff in the Professional and higher categories with effect from 1 January 1997;
3. increases in the education grant and the special education grant for disabled children for the school year in progress on 1 January 1997;
4. introduction of a time-limit on the non-removal element of the mobility, hardship and non-removal allowance;
note the recommendations on the following as described in this paper:
1. revision of the staff assessment scale for determination of pensionable remuneration of both the Professional and higher categories and the General Service and related categories;
2. modification of the post adjustment system effective 1 March 1997;
authorize the Director-General to give effect in the ILO, through appropriate amendments to the Staff Regulations, to the measures recommended by the ICSC referred to in subparagraph (a), subject to their approval by the General Assembly.

Geneva, 9 October 1996.

Point for decision: Paragraph 20.

Notes

1. Official records of the General Assembly, Fifty-first Session, Supplement No. 30 (A/51/30).

2. GB.265/PFA/8.

3. GB.265/PFA/8.

Appendix

Proposed March 1997 net base salary scale for Professional and higher categories
Figures show net base salaries in US dollars per annum at the dependency rate)

Grade	Step 1	Step 2	Step 3	Step 4	Step 5	Step 6	Step 7	Step 8	Step 9	Step 10	Step 11	Step 12	Step 13	Step 14	Step 15
D.2	81 098	82 621	84 144	85 667	87 190	88 713	.	.	.	.	.	.	.	.	.
D.1	71 326	72 668	74 010	75 352	76 694	78 036	79 378	80 720	82 062	.	.	.	.	.	.
P.5	61 647	62 803	63 959	65 115	66 271	67 427	68 583	69 739	70 895	72 051	73 207	74 363	75 519	.	.
P.4	51 718	52 814	53 910	55 006	56 102	57 198	58 294	59 390	60 486	61 582	62 678	63 774	64 870	65 966	67 062
P.3	43 431	44 460	45 489	46 518	47 547	48 576	49 605	50 634	51 663	52 692	53 721	54 750	55 779	56 808	57 837
P.2	36 162	37 077	37 992	38 907	39 822	40 737	41 652	42 567	43 482	44 397	45 312	46 227	.	.	.
P.1	29 400	30 192	30 984	31 776	32 568	33 360	34 152	34 944	35 736	.	.	.	.	.	.

Proposed real salary increase of the proposed March 1997 scale over the current scale

Grade	Step 1	Step 2	Step 3	Step 4	Step 5	Step 6	Step 7	Step 8	Step 9	Step 10	Step 11	Step 12	Step 13	Step 14	Step 15
D.2	9.7	9.6	9.6	9.6	9.6	9.6	.	.	.	.	.	.	.	.	.
D.1	7.5	7.6	7.7	7.7	7.8	7.9	7.9	8.0	8.1	.	.	.	.	.	.
P.5	3.8	3.8	3.8	3.9	3.9	4.0	4.0	4.1	4.1	4.1	4.2	4.2	4.2	.	.
P.4	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1
P.3	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1	3.1
P.2	3.5	3.5	3.5	3.4	3.4	3.4	3.4	3.4	3.4	3.4	3.3	3.3	.	.	.
P.1	6.3	5.9	5.5	5.1	4.7	4.4	4.1	3.8	3.5	3.2	.	.	.	.	.

Updated by VC. Approved by NdW. Last update: 26 January 2000.