Will the Pension Fund be put at risk again?
Following the 2008 financial market crash, the CERN Council adopted a balanced package of measures which formally committed staff, pensioners and the Organisation to contribute together to achieve a balanced Pension Fund by 2041. According to our information, at least one Member State delegation is now questioning the interest of continuing to meet its part of the commitment. This would be completely unacceptable and would lead at least to an immediate mobilisation of the pensioners.
The genesis of the 2010 balanced package
- The crash of the financial markets in 2008: -19.3% performance for the Fund, i.e. a loss of CHF 900 million, bringing the deficit to almost CHF 2,100 million,
- Noting this, in March 2008, the CERN Council decided to set up a working group (WG2) to analyse the measures needed to achieve full funding,
- In its report (CERN/2897), the WG2 noted that a large part of the deficit had been caused by the CERN Council's refusal to compensate the Fund for its past personnel policy decisions [Analysis of Structural Causes (CERN/2895)],
- Taking into account the WG2 report and the 2010 actuarial study, the Council decided in December 2010 (CERN/2947), June 2011 (CERN/2972) and March 2012 (CERN/3010) to put in place a balanced package of measures.
Let us recall the main parameters of these measures:
- Contribution for members recruited before 2012: increase from 30.88% to 34% (1/3 staff, 2/3 Organisation);
- Beneficiaries' benefits: without cost of living adjustment up to a cumulative individual loss of purchasing power of 8%*;
- Special contributions from the Organisations: CERN: 60MCHF/year; ESO: 1,3 MCHF/year;
- New pension conditions for members recruited from 2012: retirement age 67; contributions 31.6% (40% staff, 60% Organisation).
A resolution formally binds the CERN Council!
At the same time as the Council decided on this package of measures, it adopted the Resolution on the restoration of full funding (CERN/2972, Annex2) which clearly states the qualifier "balanced" and formally commits it for the future:
"The Council [...] confirms that, as the package constitutes an equitable distribution of effort between all parties, namely, staff members, pensioners and Participating Organisations, it is not possible to change any element of the package without changing the whole, it being understood that an equitable distribution model should be maintained in all cases"
Failure to comply with the Council resolution would be seen by CERN pensioners as a betrayal of this historic agreement and would be fought as such.
President of the CERN and ESO Pensioners’ Association
*Although in a defined benefit system, the pensioners have accepted this reduction in benefits.
The Staff Association fully shares the GAC-EPA's understanding of the balanced package decided in 2010 by the Council of the Organisation which, according to the Management, the Association and the Member States "constitutes a balanced and equitable package, aimed at reaching full funding of the CERN Pension Fund as soon as possible" (see document CERN/2947).
The Association also fully supports the GAC-EPA in its desire to preserve this balanced package, and notes that with its implementation the Organization is indeed on track to achieve full funding of the Pension Fund even before the planned deadline (i.e. 2041).
Finally, neither the Association nor the GAC-EPA would understand or accept the questioning of this balanced package of measures.