“Smart Parity” Cost Implications FY 2011

“Smart Parity” Cost Implications FY 2011

Secretariat for Administration and Finance

“Smart Parity”

Article 40 of the General Standards

“The salaries in force for the staff of the General Secretariat shall be the salaries in force at the United Nations Secretariat, to the extent stated below as permitted within the framework of resolution AG/RES. 1319 (XXV-O/95)”

04/19/23 2

Compensation Changes

•Professional category

– Common salary scale that changes yearly. “No-gain, no-loss”– Receive a post adjustment to compensate for cost-of-living differentials

among duty stations.

•General Service category– Different salary scales, set in local currencies, which vary widely from duty

station to duty station

•Revisions to the post adjustment and salary scales at Headquarters usually occur once a year, but may occur more frequently at the offices of the General Secretariat in the member states.

Compensation Changes

Changes promulgated by the ICSC in 2011 $1,236,217

Salary adjustments in 2010 881,417

Total $2,155,725

Changes to the post adjustment

• Reflects differences in cost of living that occur among duty stations

• Revisions may also result in decreases in remuneration levels.

• In April 2011, post adjustment for Washington DC increased from 40.7% to 44.6% of basic salary, resulting in a 2.78% increase in remuneration.

• Estimated increase in payroll disbursements: US$ 738,510.

Changes in the basic salary scale for General Services Category

• Salary scale in Washington DC increased by 3.1% effective September 1, 2011.

• Cost of adjusted salaries, overtime pay and pension benefits estimated at US$ 124,474.

•Away from Headquarters, the cost in US dollars of salaries and benefits varies due to currency fluctuations. In 2011, the salary scales of 8 duty stations were adjusted by US$ 19,244 during the year

Step increases, life insurance, end-of-service benefits

•Step Increases occur once a year (generally granted in the month of July). Result in a semi-annual increase in payroll costs of approximately US$ 352,300.

•Basic salary scale changes impacts certain benefits such as life and accidental death (ADD) insurance premiums as well as termination benefits.

•In January and September 2011, the basic salary scale was increased by 1.37% and 3,1% for the Professional and General Service categories, respectively. The estimated additional cost in life insurance premiums is about US$ 1,700.

•Object 2 (non-recurring personnel costs: accrued annual leave, termination indemnity, and repatriation grant. Estimated cost increase: US$ 38,100.

Carry-forward Impact of 2010 Increases

• Remuneration adjustments at Headquarters occur mid-year (usually in April and September for the Professional and General Services Categories, respectively).

• All compensation adjustments only affected personnel costs for part of the year.

• Their effect is then carried forward into the following year in order to estimate that the full incremental impact on the twelve months of the fiscal period.

• Increases recommended by ICSC in 2010:– 0.9% for Professionals– 7.1% for General Services

• Mid-year step increases.

• Estimated to add $881,417

Distribution of “Smart Parity” Increases

Distribution of "Smart Parity" Increases

Professionals (Post Adj) $740,199

34%

GS Salary Scales $143,718

7%

Step Increases $352,300

16%

Non-recurring Personnel $38,091

2%

Prior Year PA and Salary Scale Adj

$557,617 26%

Prior year step increases $323,800

15%

PriorYear

(Partial Year)Adjustments

41%

Variations between Budgeted and Actual Expenditures

• Total appropriation for personnel expenditures in 2011: US$ 54,943,750

• Actual expenditures incurred were US$ 54,861,886

• Below the approved budget by US$ 81,864.

• By the end of 2011, the secretariat shifted 22 positions from the Regular Fund into the Indirect Cost Recovery Account

Budgeted vs. Actual Posts

Budgeted Posts 2011 vs. Actual Payroll

400

410

420

430

440

450

460

470

480

490

500

Approved 2011 489 489 489 489 489 489 489 489 489 489 489 489

Active Employees 488 487 489 489 487 486 479 479 472 442 440 436

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Suggestions on financing of the variations between actual and budgeted costs

• Board of External Auditors Report CP/doc.455/11

• Recommendation 1.1.1: “The Board reaffirms its recommendation that the Permanent Council avoid a structural deficit in the future by ensuring consistency between the mechanism of setting OAS quotas and the mechanism of setting expenditures”

Ten-year Budget Simulation

Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CumulativeReductions

Average Cost 115.9 120.1 124.3 128.6 133.1 137.8 142.6 147.6 152.8 158.1 163.6 # of Posts 471 471 457 442 427 412 398 385 372 359 347 Projected cost 54,578.5 56,554.1 56,793.6 56,852.1 56,845.0 56,767.8 56,758.1 56,825.9 56,828.8 56,762.4 56,785.3 Threshold 54,944 54,944 54,944 54,944 54,944 54,945 54,946 54,947 54,948 54,949 54,950 Req. Reduction 365.3 (1,610.3) (1,849.8) (1,908.3) (1,901.2) (1,823.0) (1,812.3) (1,879.1) (1,881.0) (1,813.6) (1,835.5) (17,948.7)

Reduction (# of Posts) - (14) (15) (15) (15) (14) (13) (13) (13) (12) (12) (136) New Total 471 457 442 427 412 398 385 372 359 347 335

Total Pers Budget 54,944 54,873 54,930 54,923 54,848 54,839 54,904 54,907 54,843 54,865 54,822 Available for NP 30,406.0 30,476.7 30,420.3 30,427.1 30,501.7 30,512.0 30,447.6 30,445.7 30,510.9 30,489.8 30,534.3

Total Budget 85,349.8$ 85,349.8$ 85,349.8$ 85,349.8$ 85,349.8$ 85,350.8$ 85,351.8$ 85,352.8$ 85,353.8$ 85,354.8$ 85,355.8$

Increase 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Assumptions:- Annual increase in average unit cost of 3.5%- No increase in approved budget levels


Average Cost 115.9 120.1 124.3 128.6 133.1 137.8 142.6 147.6 152.8 158.1 163.6 # of Posts 471 471 466 460 453 446 440 433 427 421 415 Projected cost 54,578.5 56,554.1 57,912.1 59,167.3 60,306.3 61,452.5 62,747.7 63,910.6 65,230.9 66,565.3 67,913.2 Threshold 54,943.8 56,047.2 57,168.1 58,311.5 59,477.7 60,667.3 61,880.6 63,118.2 64,380.6 65,668.2 66,981.6 Req. Reduction 365.3 (506.9) (744.0) (855.8) (828.6) (785.2) (867.1) (792.4) (850.3) (897.1) (931.6) (7,693.8)

Reduction (# of Posts) - (5) (6) (7) (7) (6) (7) (6) (6) (6) (6) (62) New Total 471 466 460 453 446 440 433 427 421 415 409

Total Pers Budget 54,943.8 55,953.7 57,166.5 58,266.9 59,374.4 60,625.8 61,749.4 63,025.0 64,314.3 65,616.7 66,931.4 Available for NP 30,406.0 31,103.1 31,631.5 32,307.0 33,011.0 33,607.3 34,368.3 35,015.0 35,686.6 36,384.3 37,109.6

Total Budget 85,349.8$ 87,056.8$ 88,797.9$ 90,573.9$ 92,385.4$ 94,233.1$ 96,117.7$ 98,040.1$ 100,000.9$ 102,000.9$ 104,040.9$

Increase 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

Assumptions:- Annual increase in average unit cost of 3.5%- Annual increase in approved budget levels of 2%

Simulation of Personnel and Non-Personnel Budgets 2013-2022

Ten-year Budget Simulation (cont.)


Average Cost 115.9 120.1 124.9 129.9 135.1 140.5 146.1 151.9 158.0 164.3 170.9 # of Posts 471 471 471 466 462 457 453 449 444 440 436 Projected cost 54,578.5 56,554.1 58,816.3 60,519.6 62,400.1 64,193.8 66,177.2 68,216.5 70,155.1 72,304.0 74,512.6 Threshold 54,943.8 56,596.6 58,294.5 60,043.4 61,844.7 63,700.0 65,611.0 67,579.4 69,606.7 71,694.9 73,845.8 Req. Reduction 365.3 42.5 (521.8) (476.2) (555.4) (493.8) (566.2) (637.1) (548.4) (609.1) (666.8) (4,666.9)

Reduction (# of Posts) - - (5) (4) (5) (4) (4) (5) (4) (4) (4) (39) New Total 471 471 466 462 457 453 449 444 440 436 432

Total Pers Budget 54,943.8 56,554.1 58,191.9 60,000.1 61,724.8 63,631.9 65,592.8 67,456.9 69,523.1 71,646.7 73,829.0 Available for NP 30,406.0 31,356.2 32,355.7 33,263.9 34,337.2 35,311.9 36,319.3 37,512.6 38,595.5 39,715.4 40,874.0

Total Budget 85,349.8$ 87,910.3$ 90,547.6$ 93,264.0$ 96,062.0$ 98,943.8$ 101,912.1$ 104,969.5$ 108,118.6$ 111,362.1$ 114,703.0$

Increase 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

Assumptions:- Annual increase in average unit cost of 3.5%- Annual increase in approved budget levels of 3%

Documents

“Smart Parity” Cost Implications FY 2011