public meetings

A S S O C I A T I O NStaffdu Personnel

Public meetings – 7Public meetings – 7thth to 14 to 14th th June 2011June 2011

Jan.- June 2011:Jan.- June 2011:

CONCERTATION CONCERTATION

brutallybrutally

PUT TO THE TEST!PUT TO THE TEST!

2Public meetings – 7th to 14th June 2011

Concertation in dangerConcertation in danger

• Pensions: 2Pensions: 2ndnd package of proposals package of proposals• Pension conditions for new recruitsPension conditions for new recruits

• Transition measures for future retirees (=current staff)Transition measures for future retirees (=current staff)

• Concertation process floutedConcertation process flouted

• How to obtain respect of the concertation process?How to obtain respect of the concertation process?• 15 years of mutual respect since creation of TREF15 years of mutual respect since creation of TREF

• We must act now!We must act now!• We must defend the concertation process at CERNWe must defend the concertation process at CERN

• Referendum: it is time for staff to take a standReferendum: it is time for staff to take a stand








• Referendum: Referendum: it is time for staff to take a standit is time for staff to take a stand


nºnº Proposal Org.Org. CurrentCurrentstaffstaff

Future Future staffstaff

CurrentCurrentpensionerpensioner

FutureFuturepensionerpensioner

11Increase contribution rateIncrease contribution rate- from 30,88% to 34%- from 30,88% to 34% XX XX

22Freeze pensions until individual Freeze pensions until individual purchasing power loss reaches 8%purchasing power loss reaches 8% XX

33Add Special Contributions Add Special Contributions - CERN: 60 MCHF/yr until full funding- CERN: 60 MCHF/yr until full funding- ESO: 3 - ESO: 3 (1.3)(1.3) MCHF/yr until full funding MCHF/yr until full funding

XX

• 1st package - decided in Dec. 2010 and implemented as of Jan. 2011

• 2nd package - decision in June 2011 for implementation in Jan. 2012

nºnº Proposal Org.Org. CurrentCurrentstaffstaff

Future Future staffstaff

CurrentCurrentpensionerpensioner

FutureFuturepensionerpensioner

44 Modify benefits package (new staff)Modify benefits package (new staff) XX

55Introduce transition measures Introduce transition measures - relating to indexation of pensions- relating to indexation of pensions XX

Status of Pensions issueStatus of Pensions issue

Staff Council positionRemains coherent with its support given to such an

increase in 2005

- Under-indexation: reasonable mechanism- Welcomes preservation of current 8% ceiling

Asks for a CERN Council resolution

Staff Council positionUnacceptable

Unacceptable

Dec. 2010 : 91.8% of Staff

supported the Staff Council position

June 2011 : Staff Council needs the support

of the Staff


ParametersCurrent

Staff

Future Staff – as of 1/1/2012

Mgt proposals SA proposals

Retirement age 65yr 67yr 67yr but no reduction factor after 65

Contrib. sharing 1/3;2/3 40%;60% 1/3;2/3 (40%;60%)*

Contrib. rate 34% 28.33% 30.6% (34%)*

Contrib. Staff 11.33% 11.33% 10.2% (+ 3.4%)*

Contrib. CERN 22.67% 17% 20.4%

Accrual rate 2.0%i.e. 35yr

1.85%i.e. 37yr + 10 months

1.89%i.e. 37 yr

Article related to Acquired rights

Applies Does not apply Applies

Pension level Last basic salary

Average of last 3yr salary positions

Average of last 3yrsalary positions

Funding ratio back to 100%

2032-2033 2040-2041 To be evaluated, but around 2033

Indexation of pension

Annex CFunding ratio x cost-of-

livingFull cost-of-living index

No Consensus in SCC on June 6th

Arbitration process in progress

Awaiting DG decision

Pension Fund for new recruits

* Possibility for Staff to buy extra years of contribution (+10%)


Pension fund for new recruits

Package for newcomers is

unacceptable!

Future Staff = FUTURE of CERN


Transition measures for future retireesTransition measures for future retirees

Purchasing power loss

8%

Freeze

2013 2020

Staff Association proposal:

Ph

asin

g o

ut

Purchasing power loss

8%

Freeze

2013 2020

Year ofdeparture

Full COL

Management proposal:

• Management proposal is unacceptable• It is a double penalty for current staff: increase in contributions while It is a double penalty for current staff: increase in contributions while

maintaining under-indexation mechanismmaintaining under-indexation mechanism

• It breaks the agreement reached on 1It breaks the agreement reached on 1stst package by perpetuating the package by perpetuating the principle of purchasing power loss (up to 8%) for active staffprinciple of purchasing power loss (up to 8%) for active staff

Year ofdeparture

Phasing outUnder-indexation(up to 8% of ppl)


Concertation process flouted• CERN Council set up an advisory group – Dec. 2009

• No representative of Staff/PensionersNo representative of Staff/Pensioners

• Short circuit the PFGB (in contradiction with CERN PF governance of 2007) Short circuit the PFGB (in contradiction with CERN PF governance of 2007)

• Had given an inflexible mandate to the President of SCCHad given an inflexible mandate to the President of SCC

• SCC/TREF were prevented from playing their role –Jan. - June 2011

• Almost no room for concertationAlmost no room for concertation

• No willingness to reach a consensusNo willingness to reach a consensus

• Staff Association was hindered in presenting its proposalsStaff Association was hindered in presenting its proposals

• Impact of proposals on the PF balance appears to be of low importanceImpact of proposals on the PF balance appears to be of low importance

• PFGB consulted at a very late stagePFGB consulted at a very late stage

• Diktat from Member States makes a mockery of the concertation process

• Staff voice was finally ignoredStaff voice was finally ignored

• Consultation-like processConsultation-like process


Obtaining respect of the voice of the Staff

• 1994: Staff sit-in to prevent Finance Committee from holding its session in the Council Chamber

MOVIE


Concertation: fifteen years of mutual respect

• 1994 Creation of TREF1994 Creation of TREF

• 1994-2010: Employment conditions1994-2010: Employment conditions

• Management, Member States and Staff Association were able to build solutions together

• Some examples:

• 5YR 1995-2000-2005-2010: LTC, family allowances

• CHIS: a first step towards consolidation

• Pensions 2010

• Voluntary programmes: RSL, PRP, Part-Time

• 1995-2010: concertation process worked quite well1995-2010: concertation process worked quite well








• Referendum: it is time for staff to take a standReferendum: it is time for staff to take a stand


2045: Mr X ends his career after 33 years at CERN

• With the proposed measures for newcomers the CERN PF will be empty

• How did we get into this catastrophic situation?• In 2011, concertation was replaced by consultation

• MS and CERN Management impose their solutions without prior discussion (e.g., they could stop payment of 60 MCHF/yr in 2015)

• Staff Association has lost its participative role and hence its specificity and identity

• CERN has lost its identity as the only IO where Staff and Management build proposals together

We must act before it is too late


We must act now!1. We must stop this epidemic of short-termism which is invading

CERN and the world

2. We must say NO to this catastrophic scenario!

3. Just like our colleagues in 1994, the current generation must stand up and reestablish the conditions of mutual respect in the framework of a genuine concertation process

4. We must do this for ourselves, but also for the future generations

5. This is a matter of extreme urgency

6. Doing nothing will make the current attack spread like a virus and result in the deterioration of other employment conditions (next 5YR, salaries)

7. Mass participation in our referendum is needed

8. If nothing changes, mobilization in June is needed


Why a REFERENDUM?Why a REFERENDUM?

1.1. For the future of CERN and its staffFor the future of CERN and its staff

• 5YR 2010 : CERN salaries are well below those of other IO5YR 2010 : CERN salaries are well below those of other IO

• Pension is an essential employment conditionPension is an essential employment condition

• CERN must be able to attract the best candidatesCERN must be able to attract the best candidates

• CERN cannot afford to propose the worst pension plan of all IOCERN cannot afford to propose the worst pension plan of all IO

• Sacrificing future staff = sacrificing future of CERNSacrificing future staff = sacrificing future of CERN

2.2. For current active staffFor current active staff

• Transition measures = double penaltyTransition measures = double penalty

3.3. For staff representationFor staff representation

• Concertation is under attack: all employment conditions are in great dangerConcertation is under attack: all employment conditions are in great danger

→ → For all these reasons, we need your mass support !For all these reasons, we need your mass support !


ReferendumReferendum


• CERN must remain a centre of excellence onCERN must remain a centre of excellence on

• scientific groundsscientific grounds

• social groundssocial grounds

• CERN mustCERN must

• keep motivation of ALL staffkeep motivation of ALL staff

• agree on a socially acceptable packageagree on a socially acceptable package

• CERN mustCERN must

• Respect its staff by applying the concertation process Respect its staff by applying the concertation process in good faithin good faith

ConclusionConclusion

STAFF REFERENDUMSTAFF REFERENDUMVote and get your colleagues to vote!Vote and get your colleagues to vote!


SparesSpares


March 2010: successful gatheringMarch 2010: successful gathering

2000 signatures

from active and retired CERN staff !


New indexation formulaNew indexation formula

Annual variation of the Geneva consumer price

index (CVI)

Funding Ratio (FR) in % Adjustment

<0 n/a zero

Effective increase shall be reflected on individual loss of purchasing power (PP) account

0 n/a zero

<100 CVI x FR to a max. of 2%, where 2 = current actuarial parameter, as set out in the Actuary’s triennial report

NB: once individual loss of PP = 8%, full CVI shall be granted

>0 >100 CVI

>110 for 3 or more consecutive years

CVI x FR in compensation of accumulatedloss of PP

CVI if no (remaining) accumulatedloss of PP


Actuarial study: impact of second packageActuarial study: impact of second package


CERN PF is a capitalized fundCERN PF is a capitalized fund

Return on investment

Paid pensionsPaid pensions

Pension Fund AssetsPension Fund Assets

IncomeIncome140 MCHF140 MCHF

BenefitsBenefitsIndexationIndexation

Staff Staff contributioncontribution

CERNCERNcontributioncontribution

190MCHF (target 5%)

300 MCHF300 MCHF

3800 MCHF

- 1700 MCHF

Situation end 2010


ContributionsContributions

2011 new scheme: a two-speed Pension Fund2011 new scheme: a two-speed Pension Fund

Return on investment

Paid pensionsPaid pensions

Pension Fund AssetsPension Fund Assets

Staff CERN

Current Current

11.33%

22.67%

Current 65yr-2%-35yr

Staff CERN

Current New Current New

11.33%

11.33% 22.67% 17.00%

Current 65yr-2%-35yr

New 67yr-1.85%-37.8yr

CERN

60 MCHF/yr


Org. WhenType of pension

plan

Contributions

Full pension Years tofull pension Age limit Annual

adjustmentTotal Employee Employer

EPO

Before Jan.09 DB

share = 1/3 + 2/370% of Last salary 35yr 60yr As salaries

27.3% = 9.1% + 18.2%

From Jan.09

Mixed share = 1/3 + 2/370% of Last salary 35yr 60yr As salariesDB 21.0% = 7.0% + 14.0%

DC 6.3% = 2.1% + 4.2%

EIB

Before Jan.09 DB

share = 1/3 + 2/370% of Last salary 30yr 60yr As COL

30.0% = 10.0% + 20.0%From

Jan.09 DBshare = 1/3 + 2/3

70% of Average salariesof last 10 years 35yr 65yr As COL

30.0% = 10.0% + 20.0%

WTO

Before Jan.10 DB

share = 1/3 + 2/370% of Last salary 35yr 62yr As COL

22.5% = 7.5% + 15.0%From

Jan.10 DBshare = 1/3 + 2/3

70% of Last salary 35yr 65yr As COL23.7% = 7.9% + 15.8%

ESA

Before July.10 DB


25.1% = 8.4% + 16.7%From

July.10 DBshare = 40% + 60%


EUMETSAT

Before Jan.11 DB


27.0% = 9.0% + 18.0%From

Jan.11 DBshare = 40% + 60%


CERN

Before Jan.12 DB

share = 1/3 + 2/370% of Last salary 35yr 65yr Freeze (-8%)

then as COL34.0% = 11.3% + 22.7%From

Jan.12Mixed

DB/DC ?share = 40% + 60%

70% of Average salariesof last 3 years 37.8yr 67yr New Formula

based on COL28.3% = 11.3% + 17.0%

Why are all five parameters in the red at CERN?Why are all five parameters in the red at CERN?


CERN ATTRACTIVENESS AND RETENTION REDUCEDCERN ATTRACTIVENESS AND RETENTION REDUCED

Which organization, CERN or ESA, would be more attractive to an engineer seeking a new job?

• Pensions:

• Salaries20-25% higher at ESA compared to CERN

When comparing the levels of the global package, and in particular the pension packages

→ ESA would obviously be more attractive!

CERN’s attractiveness would be dramatically reduced!

Org. WhenType of pension

plan

Contributions

Full pension Years tofull pension Age limit Annual

adjustmentTotal Employee Employer

ESA From July.10 DB 23.3% = 9.3% + 14.0% 70% of Last salary 35yr 63yr As COL

CERN From Jan.12

MixedDB/DC ? 28.3% = 11.3% + 17.0% 70% of Average salaries

of last 3 years 37.8yr 67yr New formula based on COL


From reason ..... to politicsFrom reason ..... to politics• FACT: MS try to push through their pension agendaFACT: MS try to push through their pension agenda

• Measures are introduced in parts: divide and conquerMeasures are introduced in parts: divide and conquer

• After many SA requests, After many SA requests, PFGBPFGB was included at a late stage in was included at a late stage in discussions on measures for new staff discussions on measures for new staff everything pre-decided everything pre-decided by Council. by Council. Is this compatible with new governance of the Is this compatible with new governance of the CERN PF decided in 2007?CERN PF decided in 2007?

• Due to the lack of sufficient room for manoeuvre allowed by the Due to the lack of sufficient room for manoeuvre allowed by the MS, the MS, the SCCSCC could not play its role and allow Staff and could not play its role and allow Staff and Management to build a solution together Management to build a solution together

breach of concertation process due to breach of concertation process due to DiktatDiktat of MS of MS

• TREFTREF did not play its role as a forum of discussion. No did not play its role as a forum of discussion. No discussion possible in March and oriented discussions in May.discussion possible in March and oriented discussions in May.


What about acquired rights? What about acquired rights?

• The provisions of Article III 1.02 of the Fund’s Rules, entitled The provisions of Article III 1.02 of the Fund’s Rules, entitled “Acquired Rights”, shall not apply to new members, who “Acquired Rights”, shall not apply to new members, who shall, however, continue to enjoy the general protection shall, however, continue to enjoy the general protection afforded by international administrative law.afforded by international administrative law.

• This means the retirement age at 67 years could be This means the retirement age at 67 years could be increased at any time!increased at any time!

• If a more favorable scheme were decided in the future (e.g., If a more favorable scheme were decided in the future (e.g., better accrual rate) better accrual rate) →→ no way to join this new scheme. no way to join this new scheme.

• This is totally unacceptable and disregards the status of This is totally unacceptable and disregards the status of International Civil Servant.International Civil Servant.

• FICSA is kept informed and will coordinate a joint response.FICSA is kept informed and will coordinate a joint response.


Special contribution of 60 MCHF/yr?Special contribution of 60 MCHF/yr?• Not indexed Not indexed decreasing effect with time decreasing effect with time

• Compensated by savings in contribution (- 5.67 points of %) Compensated by savings in contribution (- 5.67 points of %) increasing effect with timeincreasing effect with time

• Efforts of all parties become clearly unbalanced as the special Efforts of all parties become clearly unbalanced as the special contribution is totally funded by savings in contribution as from 2038 !contribution is totally funded by savings in contribution as from 2038 !


A reduced pension for the majority of new staffA reduced pension for the majority of new staff

• 60 % of staff recruited 60 % of staff recruited over age of 30over age of 30

• Will get a reduced Will get a reduced pension (< 70%)pension (< 70%)

• Voluntary scheme is a Voluntary scheme is a real need!real need!

• The average The average recruitment age is 34 yr recruitment age is 34 yr and not 30 yr!and not 30 yr!

public meetings – 7 th to 14 th june 2011 jan.- june 2011: concertation brutally put to the test!

Documents

tharbitration process

concertation brutallyput

years of mutual respect

staff council positionjune

future retirees

creation of trefwe

nd package decision