Every two years, an actuarial valuation for the Fund is completed by the Consulting Actuary. The valuation provides the present and future liabilities of the Fund and compares that to current and projected Fund assets, respectively. The most recent valuation was completed as of 31 December 2015. This valuation revealed a small surplus of 0.16% of pensionable remuneration. This means that the 23.7% of pensionable remuneration collected annually for each participant (1/3 paid by the staff member and 2/3 paid by the Member Organization) is 0.16% above what is required to achieve balance. This means that we are collecting enough money, taking into account future investment income, to cover the benefit obligations for all current and future participants and beneficiaries.
Valuations are performed using economic assumptions such as inflation and investment return and demographic assumptions for projecting participant growth, mortality, separation, and disability. The regular valuation that was performed as of 31 December 2015 used the following three economic assumptions: (a) an assumed rate of increase in pensionable remuneration of 3.50 per cent per annum; (b) an assumed rate of nominal investment return of 6.50 per cent per annum; and (c) an assumed rate of inflation of 3.00 per cent per annum. It was also assumed that the growth in participant population for each of the next 10 years would be 0.5 per cent per annum, with a “zero participant growth assumption”, thereafter.
Actuarial services are provided by Buck Consultants LLC. A Committee of Actuaries, consisting of seven independent actuaries, is also appointed on the recommendation of the Pension Board. Its members are selected from the five different regions of the world. The Committee’s function is to review the actuarial results and advise the Board on actuarial questions arising out of the operations of the Fund’s Rules and Regulations.