Once you become eligible to receive a retirement benefit, part of the benefit can be commuted into a lump sum which would be payable upon separation from service. The lump sum may not be greater than 1/3 of the actuarial equivalent of the full benefit and the remaining periodic benefit will be reduced accordingly (see UNJSPF_Web/pdf/RegRul/RegulationsRulesPAS_2015.pdf »>Articles 28(g) and 29(e) of the Fund’s Regulations).
If a retiree selects to commute part of his/her benefit into a lump sum, the Fund will automatically pay the maximum lump-sum allowed (i.e., the actuarial equivalent of 1/3 of the benefit OR the total of his/her own contributions with compounded interest, whichever is greater). The retiree may, however, choose a lesser amount as a lump-sum by specifically indicating such amount in the PENS.E/7 payment instructions form.
The Lump Sum is always calculated and paid in US dollars. If you want it in local currency, it will be converted at the current exchange rate applied by your bank. If you want to keep it in US dollars, be sure you have already opened an account in US dollars and that this account is the one indicated on your payment instructions form.
Please note that once the Fund has implemented your benefit election, it is considered irrevocable.
Please note, Tax related queries (e.g. regarding taxation of benefits and lump sum payments) cannot be addressed by the UNJSPF as this is not within the Fund’s competence or authority. Indeed, as fiscal periods and national tax laws are exceedingly divers and complex, and subject to frequent changes, the Fund is not able to maintain up to date familiarity in this field or to give advice to participants or retirees in this area. Keeping this in mind, for some additional information regarding tax issues, please refer to the FAQ section concerning Taxation as well as to the tax related information available on the Fund’s website at the following link: http://www.unjspf.org/UNJSPF_Web/page.jsp?role=part&page=taxguide
The Withdrawal Settlement under Article 31 is one-time benefit payment to a former participant who is not entitled to or chooses NOT to elect ANY form of periodic pension benefit that carries potential future survivors’ benefits; the former participant will receive the reimbursement of his/her own contributions plus interest, and where applicable increased by 10 per cent for each year in excess of five up to a maximum of 100 per cent. A withdrawal settlement extinguishes all other rights to any other future benefits.
At the request of the beneficiary, articles 28 and 29 allow for partial commutation of up to 1/3rd of the pension entitlement into a one-time lump-sum cash payment. If elected, the lump-sum represents a portion of the periodic retirement benefit and is payable at the time of benefit implementation; it can represent up to a maximum of 1/3 of the actuarial equivalent of the retirement benefit. If a beneficiary elects to commutate part of his/her retirement benefit into a lump sum, the proportionately reduced balance will be paid for life to the beneficiary in the form of a periodic benefit. Payment of the lump sum does not impact the right/s to potential future survivors’ benefits.
Lump Sum Specifics
If I decide to take a lump sum does it have to be a one third lump sum?
No. You may take any amount as a lump sum provided that it does not exceed the actuarial equivalent of one third of your benefit or your contributions with interest.
May I have my lump sum paid into a different account than my monthly benefit?
If I wish to receive my lump sum in a currency other than US dollars how will the conversion be done? And what about the monthly pension?
Your US dollar lump sum would be converted by the bank, using the bank rate of exchange available at the time of payment. On the other hand, should you request to receive your periodic benefit in an equivalent currency, the UNJSPF itself would establish the amount payable by using the UN Operational rate of exchange in effect for the month preceding the calendar quarter of payment. See information on the local or two-track pension system.